Policymakers and education leaders laud students who finish their college degrees within the four-year ideal. But Mario Escalera, a University of Texas at San Antonio student, will be glad to earn his bachelor's in about twice that — especially if it means he can avoid student loan debt.
The first-generation college student, who was raised on the Southeast Side by grandparents from Mexico, said his family instilled in him a strong fear of borrowing money.
“Because they had no credit, they never saw loans as an option,” said Escalera, 27. “It was always working hard for your money, saving it and buying what you wanted in cash.”
His trepidation, which has persisted even though he has worked at a bank during much of his post-secondary schooling, is similar to that of many Hispanic students, according to national research and observers at several Texas schools.
And if college costs continue to rise, fear of borrowing could form a barrier to higher education for the city's and state's burgeoning Hispanic population.
Experts and financial aid directors say students and their families struggling to pay for college through other means may need to walk the tightrope of student loans — finding a balance between borrowing amounts they can't repay and shunning loans entirely.
Students who fund their full-time studies by responsibly taking out loans are more likely to wind up with a degree and the earning potential that comes with it, said Michelle Asha Cooper, president of the Institute for Higher Education Policy, a Washington-based nonprofit.
But experts say students should exhaust all other resources, like scholarships and grants, and explore federal loan options before considering private lending, which many consider to be more risky.
Though it's not seen at all schools, financial aid staff from the University of Texas at Austin and Texas A&M University in College Station, the University of Texas-Pan American in Edinburg and locally at Northwest Vista College say they have anecdotal evidence that Latino families are more averse to pursuing student loans.
“It's not often that I'll find a family, it doesn't matter what their background is, that's excited about loans. But definitely with some of the Latino families that I've met with, they are worried, scared,” said Jamie Brown, spokeswoman for UT Austin's Office of Student Financial Services. “It's a new experience for them altogether, transitioning from a high school senior to a college freshman. Adding on top of that experience having to borrow to go to school is frightening.”
Beyond worries about debt and a lack of information, immigrant families in particular may rely more on a cash economy, according to a 2008 study of student borrowing by IHEP and another Washington D.C.-based nonprofit, Excelencia in Education.
Mexico's financial sector is characterized by social exclusion, which means adults with lower incomes are less likely to have bank accounts and more likely to use informal loans or save up to pay cash, said Violeta Díaz, a native of Mexico and an assistant finance professor at New Mexico State University. That could affect perceptions about student loans among immigrants to the United States, she said.
The study found U.S. students who needed at least $2,000 but declined to borrow it during their freshman year were more likely to stop their studies after three years without earning a degree. Those who work while in school or who stop school to earn more money are also less likely to graduate, said Deborah Santiago, Excelencia's vice president.
“The more you work the less likely you are to complete,” she said. “If you do finish, it will take you longer, generally, and the opportunity cost increases.”
Santiago said starting financial literacy programs for younger students and their parents can help them make good decisions when it comes time for college.
A group of 75 area high school students, most from low income backgrounds, learned the basics of campus life and financial aid at a Generation TX San Antonio camp at Trinity University last month.
Monica Morales, 16, a Fox Tech High School student at the camp, said she hopes to get enough scholarships to cover her college costs at a university like Trinity. But rather than take out a loan, she said, “I would get a job or, if I really, really have to, I guess I'd choose another school.”
Noe Ortiz, Northwest Vista's director of student financial services, said he's seen a tad more borrowing in recent years, but attributes that more to the state of the economy than to a cultural shift. He cautions students against over-borrowing and said going to school part-time and working may be the right choice for some.
When Escalera started college, he made ends meet by working while he took a couple of classes at San Antonio College each semester. Four years later, he'd earned his associate's degree in teaching. After his daughter was born, he transferred to UTSA to study English as a Second Language education, all while working at a bank and, more recently, picking up a work-study job as well.
At one point, Escalera did take out a $2,500 student loan but, when he withdrew it from the bank to pay a bill, his home was robbed and the money stolen.
The experience only reinforced his negative view of loans, though he wonders if he might have finished his degree by now if he'd taken on more debt.
“I've wanted to stop school, but I've heard so many statistics about how first generation Mexican Americans with kids (drop out). I don't want to be that person,” Escalera said. “It's taking me a long time but it's going to be worth it.”