The number of Latinos going to college is up. That’s great, but only half of Latinos who begin college complete a degree. The best scenario is that all these new Latino collegians will graduate with little college debt and a degree that will earn lots of money over their lifetimes. The worst scenario is that they will not complete a degree, at the same time take on a bunch of debt, and leave college in worse financial shape than when they began. Unfortunately, the worst case – no degree and demasiado debt – could happen to half of Latinos who begin college.
A reality check on colleges will put this in perspective. Colleges want to make money, which they get from students. It is naïve to think that all colleges, and universities, are altruistic organizations that do what is best for their students. Too many of these organizations do what is best for their leadership and faculty, which includes encouraging students to borrow money, allowing universities to continuously increase the cost of an education. “At top colleges, debt fuels extravagance,” write Andrew Hacker and Claudia Dreifus.
College students, both those who earned a degree and those who did not, owe more than $1 trillion in debt to colleges. The typical Latino college student takes on about $9,000 in education loans every year. That adds up to a $45,000 in debt, plus interest, after five years. For Stafford loans in 2011-2012, the interest rate could be as low as 3.4 percent but it will increase to 6.8 percent for 2012-2013. Let’s assume you graduate (or don’t) in 2014 with $45,000 in debt and an average interest rate of 5 percent. Paying $500 per month, it will take you nearly 10 years to pay off the debt and ultimately cost you a total of $56,500 – way more than $45,000.
One of the biggest costs of a college education is living away from home or “room and board.” So live at home and go to the local community college for the first couple of years before enrolling in a four-year university. Also, avoid the prestigious – and oh so expensive – Ivy League schools where students are paying more for the reputation than the education. Unless you are going into a very specialized field, where you earn a bachelor’s degree is irrelevant. What is more important is the difficulty of the classes you take (statistics is better than literature), the work experience you get (professional internships are better than working at the grocery store), and the business connections you make (join a professional organization as a student member and meet a bunch of company presidents).
A college education is important, but not everyone has the ganas and discipline to make it through to completion. If you go to college to party and use loans to pay for the partying you will find yourself spending much of the rest of your life paying for those couple of years of partying. If you are uncertain about college, then go part-time and pay for it as you can afford it. And don’t obsess over getting into the “best” college. It is what you do, not where you go, that is important to most employers.
By guest contributor, Orlando Rodriguez.
Disclaimer: The views and opinions expressed in this article are solely those of
the author and should not be understood to be shared by Being Latino, Inc.