Latino Students Hit Hard by Doubling Student Loan Rates

As student loan interest rates are set to double in 4 days for 7.5 million students, college leaders of Hispanic Serving Institutions are urging the US Senate to take swift action to freeze the low rate on subsidized Stafford student loans. On July 1, if Congress does nothing, the interest rate will double from 3.4 percent to 6.8 percent for new subsidized Stafford student loan borrowers, negatively impacting Hispanic students.

"Higher education is crucial to economic stability long term, so it is a top priority of ours to ensure that Latino students succeed," said Dr. Maria Vallejo, provost of Palm Beach State College in Lake Worth, Florida.

"Financial barriers are mentioned time and again as a key reason why Latino students, and indeed many other college-qualified individuals, opt out of post-secondary education. That's why federal financial aid programs, including the Stafford student loan program, are more important today than they ever were. Student aid indicates to students and their families that if they decide to advance their education, society will help."

"There's a great deal of good that our nation's colleges and universities are doing to ensure access and quality with regard to educating and training the American people," said Dr. Jose Vicente, president of Miami Dade College North.

"But for too many students, while they do earn a degree or college credential, it is at a lifetime expense called DEBT! It is unfair to the people of America that such a dichotomy will potentially exist in that we're facilitating their educational attainment by leaps and bounds, while instituting student loan interest rate increases that will severely hamper their potential to realize the American Dream."

Hispanics constitute 16% of the total population of the US, and are the country's largest minority group. But they are the least represented in higher education. Only 12 percent of Hispanics have bachelor's degrees compared to over 30 percent of non-Hispanic whites.

However, the economic downturn has hit Latinos hard. Median household wealth among Latino households fell by 66 percent over the past several years, with over 59 percent reporting that someone in the household has been out of work just in the last year, according to the Pew Hispanic Center.

US Department of Education figures state that 986,000 Hispanic American students will see their rate jump, resulting in an additional $1,027 in debt on average.