The Cost of Higher Education: Impacts of Student Loan Debt on the Life Course for Hispanic Americans

Student loan debt continues to be an issue in the U.S., with potential long-term effects on loan repayment and potential wealth accumulation. In particular, minorities face barriers in the educational system and accruing wealth. Hispanics occupy a middling position in the U.S. racial hierarchy. Using the National Longitudinal Survey of Youth 1997 geocode data, in this study I examined how Hispanic-White differences in student debt change over time and how student debt influences wealth. In addition, I accounted for immigration status via parents' nativity status to investigate debt burdens and subsequent wealth for these respondents. I used hierarchical linear growth models to examine debt growth over time and linear decomposition to examine Hispanic-White differences in wealth accumulation and the impact of student debt on these differences. While findings were largely statistically insignificant, I found that Hispanics tended to start with less debt than their White counterparts and that student debt initially grew for both groups. However, White respondents pay off their debt more quickly than Hispanics. In addition, I found that the wealth gap between White and Hispanic respondents grew significantly between the ages of 20 and 35. While Hispanics tended to start with less debt, my findings suggest that student debt still plays a role in Hispanics' financial well-being, including Hispanic wealth development and the perpetuation of the Hispanic-White wealth gap