For some Latinx college graduates, student loan debt affects mental health

The relationship between emotions and the economy are real, especially for Latinx college graduates who carry upward of $25,000 in college loan debt.

A new study draws on interviews from two data-collection periods — in 2018 and 2022 — during which Latinx participants expressed a broader range of emotions, from optimism to more critical reflections on the student loan system amid the repayment pause implemented during the COVID-19 pandemic. This study focuses on millennials, who born between 1981 and 1996.

Research findings were published recently published in the journal Socius: Sociological Research for a Dynamic World. The study was led by University of California, Merced sociology Professor Daisy Verduzco Reyes, a researcher with the UCLA Latina Futures 2050 Lab. 

“There is important research documenting the wealth gaps and student loan balance inequities between white and Black borrowers. However, we know less about Latinx borrower experiences,” said Reyes, whose last two years of research have been supported by Latina Futures, an initiative spearheaded by the UCLA Chicano Studies Research Center. Funded by a $15 million California state budget allocation, Latina Futures seeks to increase knowledge and insight through applied policy research on the contours of the economic, political and social lives of all women and girls living in the United States

According to researchers, the average millennial borrower has $33,000 in student debt, whereas the average college-graduate baby boomer (people born between 1946 and 1964) received their diploma with only $2,300 in student debt. During the student loan repayment pause, activated in 2020 and ending in 2023, an estimated 35 million Americans qualified for this relief from payments.

Other findings:

• The average wealth of white families in 2022 was over $1 million
• The average wealth of Latinx families in 2022 was $227,544
• The median white borrower carries 65% of their original loan balance 12 years after graduation
• The median Latinx borrower carries more than 80% of their original loan balance 12 years after graduation

Reyes and coauthors Kimberly Garcia-Galvez, a UC Merced graduate student, and College of the Sequoias sociology Professor Melissa Quesada found that 37 of 41 interviewees carry student loan debt of more than $26,000. Garcia-Galvez and Quesada are Latino Futures scholars.

Of the 41 research participants, 26 graduated with $51,000 to more than $100,000 in debt. Respondents told researchers this led to delaying major milestones, such as having children and saving for retirement.

“There is a definite connection between mental health and wealth here,” Reyes said.  

When researchers conducted the first set of interviews with Latinx college graduates in 2018, responses about student loan debt tended to reflect despair and shame. In 2022, respondents said the loan pause had allowed them to pay off other expenses and, in some cases, increase their savings. Overall, research participants demonstrated improved emotional well-being. 

“These benefits have likely been shared by borrowers of other racial and ethnic groups, but given that Latinx children of immigrants are more likely than any other group to provide financial transfers to their parents, their relief had particular intergenerational reach,” Reyes said.  

According to the researchers, little research has examined the full range of emotional responses to student loan debt, let alone how these responses manifest across ethnic groups or were affected by the 2020–23 repayment pause.

“We have seen working-class resentment mobilized successfully in our electoral politics by the right since 2016,” Reyes said. “If a Latinx middle class is to truly emerge, their fate hinges on whether and how successfully this mostly first-generation cohort of college graduates is able to benefit from their degrees —and how they feel about it. Student loan forgiveness is a significant part of this.”