The cost of college has spiraled beyond the reach of many families and is leaving millions of students and graduates with debts that are keeping them from realizing their financial goals.
An examination of the increasing amount of student loan debt being accumulated by students in the African-American community at a large state university in Southern California provided information used to educate students about their financial options and assist them in making wise student loan borrowing choices.
The purpose of this study was to identify the trends in student loan borrowing of African American undergraduate students at a four-year public institution in Southern California and identify the factors influencing their borrowing.
The study aimed to shape the advising and policies that govern student loan borrowing at the large state university for the African American undergraduate student population. The study analyzed institutional data and used survey questionnaires to determine what trends existed, coupled with focus groups to further understand the factors associated with student loan borrowing.
The emerging trends were: knowledge and information, borrowing behaviors, and repayment considerations. The emerging factors were: increases in housing expenses, budget awareness, affordability of in-state institutions, independence and social capital, and the benefits of student debt. These factors were consistent throughout all focus groups and were the core of student perceptions and deep feelings regarding the impact that student loan borrowing had on their college experience.
In comparing information gathered from all four focus groups, it was apparent that housing costs and tuition were the main factors that influenced student loan borrowing. While a well-rounded college experience prepares students for hands-on and real-world life experiences, increasing costs of the most apparent college expenses may be pushing students into more debt than their future careers may be able to sustain.
The following three conclusions resulted from this study; more education on financial literacy is needed, alternative methods to fund education are needed, and housing and meal plans are the primary factors of student loan debt.
