President Joe Biden has announced a student loan debt relief plan this week that the White House estimates will impact more than 40 million borrowers nationwide.
It will cancel up to $10,000 in federal loans for individuals making less than $125,000 a year. For low-income students who received Pell Grants, they can receive up to $20,000 in student loan forgiveness.
According to research by Excelencia in Education, 50% of Latinos in higher education receive federal Pell Grants to help pay for college.
Deborah Santiago, CEO of Excelencia in Education, said that relative to other groups, Latinos are less likely to take out loans and more likely to go to part-time or a mixed enrollment in order to pay for college as they go.
“Many of our students, having this kind of debt, doesn’t just impact an individual student, but [also] the families and communities,” Santiago said. “When you take on debt, especially when you don’t complete, that perpetuates and so paying for college and looking at debt and what it takes is really important.”
Santiago said that for Latinos who do take out loans for college, there is a significant difference when looking at 2-year versus 4-year college programs.
“We don’t want our students to graduate with a tremendous amount of loan debt whether they are at the undergraduate or graduate level, “ said Maureen Amos, executive director of Financial Aid at Northeastern Illinois University.
She said that they do see more Black and brown students borrowing at the undergraduate level when there could be more free money assistance given like grants and scholarships.
The Better Business Bureau also released a warning about student loan forgiveness scams in light of Biden’s new plan.
Amos advises borrowers to check with financial aid offices on the credibility or legitimacy of any emails or physical mail they might be receiving.