Guest Column

Hispanic incur heavy student loan debt

By Laura Bohorquez

According to a study published by The State of Public Interest Research Group's Higher Education Project (March 2004), fifty-eight percent of Hispanic students graduate with unmanageable debt compared to thirty-seven percent of non-Hispanic, white students. The largest portion of the money owed comes from student loans, which often creates a heavy burden for Hispanic college graduates since many are more likely to come from low-income backgrounds. Twenty-three percent of Hispanic dependent students come from families with a household income of less than $20,000 annually.

While student loans are the main source of post-college debt, forty-one percent of students also graduate with considerable credit card debt; often falling prey to inviting offers from credit card companies in order to cover expenses without considering the long-term effects of the high-interest rate they come with.

"Mounting credit card and student loan debt can jeopardize a Hispanic student's dream of completing college because of being forced to drop out early. We believe students need to develop a strong financial knowledge base while in college so they can make positive choices." said Rafael Gutierrez, Director of Multicultural Markets, Hispanic Division, at Allianz Life.

Having financial knowledge prior to entering college can be beneficial for staying of debt. A research by Consolidated Credit Counseling Services, Inc, indicates that only fifteen percent of high-school students take a personal finance class. In addition, the Jump$tart Coalition for Personal Financial Literacy, a non-profit organization which promotes financial literacy at the K-12 level, has found that parents are not talking to their children about the responsibility that goes along with using a credit card.

Allianz Life Insurance Company of North America (Allianz Life ®) has just released the Financial Survival Tips for College Students to be found in English http://www.allianzlife.com/PressCenter/PressHHYA_eng.aspx and Spanish http://www.allianzlife.com/PressCenter/PressHHYA_spa.aspx on the Allianz Life Web site.

Financial Survival Tips for College Students was developed to educate students and parents about the potential pitfalls of taking on debt. The tips also provide important information about financing an education, using credit responsibly, and investing for the long-term - all intended to help students gain a realistic perspective on spending and saving.

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Laura Bohorquez is an Account executive at WingLatino, New York. Contact at: lbohorquez@winglatino.com

  (In accordance with Title 17 U.S.C. Section 107, this material is distributed by HispanicVista.com (www.hispanicvista.com) without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)