LGBTQ loan borrowers disproportionally impacted by debt
June 21, 2018
Being in debt can add pressure to a student’s already stressful life. However, a recent study shows loans may place a disproportionately heavier burden on members of the LGBTQ community.
Student Loan Hero, a company that gives loan advice, reported 32 percent of LGBTQ students said their gender identity or sexual orientation was a factor in being denied financial help and services. Miranda Marquit, lead researcher on the Student Loan Hero LGBTQ finances report, said the findings suggest student loans may equal financial freedom.
“We asked students the reason why they regretted their debt and many said they regretted their debt because they couldn’t find a job in the degree area they went to school for,” Marquit said. “LGBTQ students are graduating with their student loan debt and then they’re unable to find jobs that pay them well enough. It’s more difficult for a person who is out as LGBTQ to find a well-paying job.”
The study shows 60 percent of LGBTQ borrowers regret taking out student loans, compared to the 45 percent of borrowers in the general population. According to the study, people in the LGBTQ community also have an average of $112,607 in student loan debt, which is $16,000 more than the general population.
Marquit said these students become jobless post-graduation due to their failed efforts to find jobs that utilize their degrees to pay off their loans. Fifty-three percent of LGBTQ graduates report earning less than $50,000 annually, making it harder to pay off years of accumulated debt, according to the study.
“A lot of people don’t understand their options,” Marquit said. “Financial literacy in the U.S., in general, is fairly low and the problem of financial literacy is exasperated in the LGBTQ community. In some ways, about a third of members of the LGBTQ community have been denied financial services because of their gender identity or sexual orientation.”
Marquit said the biggest factor to combat the regret these students are feeling is to educate incoming college freshmen on loan options. However, becoming educated is only one factor to reduce the risk of debt-induced regrets.
Among the various reasons why LGBTQ people regret their loans, one unique trend is fewer of those students have familial and financial support than their peers. Only 39 percent of LGBTQ respondents in the report felt entirely accepted by their families and 33 percent claimed to have been kicked out of their homes due to their sexual orientation or gender identity.
According to a fact sheet by Out & Equal, nonprofit organization that advocates for LGBTQ workplace equality, people can be fired for their sexual orientation or gender identity. The report also concluded 1 in 4 LGTBQ workers have experienced employment discrimination.
Cody Davis, sophomore in LAS, said he isn’t worried about students loans yet, but he has already experienced the struggle of being employed as a transgender man.
“I’m not surprised that people who are getting loans regret it,” Davis said. “Getting a job is even harder. When I applied for a job in Chicago, I felt like I couldn’t put my preferred name on the application.”
Davis said after the University discovered he was transgender, they granted him the same amount of scholarship and loan money as before. The continuation of money could be because he is a minority and the University wants a diverse student population, he said.
The money Davis gets is handled by his mother, he said, and he isn’t sure what to do when it will be time to pay off the loans. Marquit said the importance of financial literacy and financial services will help students like Davis pay off their student loans.
In addition to education, Marquit believes the more accepting the general population becomes toward LGBTQ people, the easier it will be for them to catch up financially.
“Until society moves beyond mere tolerance of the LGBTQ community, there’s not a whole lot that can be done,” Marquit said. “Schools need to step up in those communities and offer proper referrals because a part of that financial peace is getting proper social support as well.”