Student debt is crushing dreams for this group


By Carmen Reinicke, CNBC

More than half of LGBTQ student loan borrowers say they regret taking on college debt. That's 15 percentage points higher than the general population, according to a survey by Student Loan Hero.

The survey focused on borrowers who identify as LGBTQ. More than 11,000 students were surveyed in February 2018.

Student debt is a burden for many young people, regardless of their sexual orientation or gender identity. The total amount of debt has reached $1.5 trillion, with 44.2 million Americans paying back loans for higher education, according to Student Loan Hero, an online resource for managing student loans.

[post_ads]Across the board, the average amount of debt that a student graduates with is nearly $40,000, according to Student Loan Hero, while the average projected starting salary for those with a bachelor’s degree is just over $50,000, according to a study by Korn Ferry, an organizational consulting firm.

However, being a part of any nontraditional community can add extra barriers to pursuing higher education, graduating and finding gainful and steady employment. All of these things impact repayment of student loans.

Whereas only 13 percent of student borrowers who identify as men, overall, said that their debt is unmanageable, 28 percent of women borrowers and LGBTQ students of any gender identity said the same, according to Student Loan Hero.
Lack of family support

The LGBTQ students surveyed reported higher levels of debt, about $16,000 more than the general population.

Nearly half of LGBTQ adults say that at some point in their lives they were rejected by a family member or close friend because of their sexual orientation or gender identity, according to a 2013 study by the Pew Research Center. This often includes financial support before, during and after college.

Jorge Valencia, executive director and CEO of Point Foundation, a scholarship provider for LGBTQ students, said that many LGBTQ youth are worried about the cost of college. He said that the foundation receives more than 2,000 applications annually for 20 to 30 scholarships.

Of those that apply, “41 percent report that they delayed their educational pursuits because of the cost of education and because they didn’t have familial support,” said Valencia.

“When there’s less parental involvement or support, students are much less likely to fill out a FAFSA [the required form most schools use to determine financial aid], and will have a hard time even getting student loans or turning to private student loans,” said Todd Christensen, education manager at Debt Reduction Services, a non-profit credit counselling agency providing debt management and financial education programs.

“We take on more debt to subsidize college, and then can’t get a job that’s commensurate to the amount of debt we have,” said John Schneider, co-owner of Debtfreeguys.com, a personal finance site for the LGBTQ community.
In the workforce

There are also employment barriers that may make it harder for some students to pay back their loans. Those surveyed by Student Loan Hero reported lower incomes than the general population.

“Employer discrimination is an issue that ultimately translates into a financial issue,” said Michael Adams, CEO at SAGE, a national organization that focuses on advocacy and services for older LGBT adults.
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The unemployment rate for the LGBTQ community is higher than that of the general population. In 2015, nearly twice as many gender-nonconforming individuals were out of a job, according to joint report by the National Center for Transgender Equality and the National Gay and Lesbian Task Force.

In addition, one-quarter of LGBTQ employees have faced discrimination in the workplace in the last five years, and 1 in 10 have left a job because of the environment, according to a 2017 workplace equality report by Out & Equal, a workplace advocacy group.

“If you have interrupted employment or are under-employed, it will just be that much more difficult to make loan payments or pay it off,” said Olin Winn-Ritzenberg, a youth education services coordinator at The LGBT Community Center in New York. “Your degree is not working for you in the same way as it’s working for other people, and then it’s compounded if you’re a person of color, have a disability or are an immigrant.”

Audrey, a member of the LGBTQ community who asked that her full name not be used to protect her employment status, said that it took her months after graduating to land a job. She’s a veteran who took out loans to get her MBA and change careers.

“The more debt you add on, the more you’re pinning your hopes on getting the job you want,” she said.

Today, she works at a Big Four consulting firm, but the job is not what she had hoped for both in terms of the work she’s doing and the amount of money she’s making. She’s glad to be paying down her debt, but said there are extra steps she’s had to take to get there.

Yet, there has been progress in society for LGBTQ individuals. Today, 92 percent of Fortune 500 companies have rules that protect against discrimination based on sexual orientation, and 82 percent include gender identity in those policies, according to Out & Equal.

“LGBT lobbying in Washington has been focused on non-discrimination legislation that has yet to be achieved,” said Gregory T. Angelo, president of Log Cabin Republicans, the nation’s organization representing LGBT conservatives and straight allies. “Corporate America has taken the lead on that.”

In some states, it is still legal to fire someone for being lesbian, bisexual or gay. The Human Rights Campaign tracks which states prohibit discrimination based on sexual orientation, gender identity or both and for what employees. There are only 21 states (as well as Washington, D.C.) that prohibit discrimination based on both sexual orientation and gender identity.

Angelo said that corporations have inclusive policies even in the states that do not have anti-discrimination laws. But there is still work to be done.

“There’s a culture beyond legislation or corporate policy that would allow LGBT people to not think twice about being their authentic selves,” Angelo said.
Moving forward

There are many people and communities that can offer support and guidance to LGBTQ students, said Point Foundation's Valencia.
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Having a college education significantly increases your earning power. Earners with a bachelor’s degree made 1.5 times as much as those with only a high school diploma in 2017, according to the Bureau of Labor Statistics.

Having a degree “will benefit themselves and society and help get to a place in the future where they won’t have to be worried about being fired for their sexual orientation or gender identity,” said Valencia.

“One thing I think is important is that there are many paths to the same destination,” said Winn-Ritzenberg from The LGBT Community Center.

He advises his students “to not feel bad or judged because of the way that you’re moving through a system, if it takes a little longer, it takes a little longer.”

In addition, the value of specific skills are increasing, showing the beginning of a shift in higher education that could be less costly and more equally accessible. It is possible to build a career without a degree, especially in a STEM-related field.

“We have seen corporations and companies step up and understand that their bottom line is reliant on people that are diverse,” said Valencia from Point Foundation.

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