"My mother dropped out of high school in the 10th grade. Watching her at the kitchen table struggling to pay the bills, I used to swear I’d never be like her. I thought education was the way out. So I fought, worked hard, went to a prestigious college, then an Ivy League graduate school. I thought, 'finally this little girl, who was not supposed to succeed, did.' Now here I am, first in the family to graduate from college, struggling to pay the bills just like my mother always did."
- Ashley, Miami, FL

Student loan debt affects the vast majority of college students. Despite our shared burden, some groups of students may be struggling more than others.

Adults from black and Hispanic families are more likely than white students to agree that “success demands a degree,” yet the same groups, particularly first generation college students and students from low-income backgrounds, face a disproportionate number challenges on the path to college and post-college financial success.

Read on to learn about how the student loan system has long been stacked against the borrower and to get the tips first generation college students need to know about student loans.


What You Need To Know

  • Students of color and first generation college students are more likely to take out student loans to fund their education.
  • The value of the Pell Grant, which the federal government has long offered to support students from low-income backgrounds, has declined in recent years, forcing students from low-income backgrounds to rely more on loans.
  • 84% of Pell Grant recipients graduated with student loan debt, compared to 46% of non-Pell recipients.
  • Not only is it challenging to balance working during college, but it’s increasingly losing value. The rising cost of college means and low earnings from a part-time, minimum wage job make it impossible to “work your way through college.”
  • For the first time ever, students with college educated parents and first generation college students are earning equal salaries out of college. However, the long-term career trajectory and earnings of each group have not yet been tracked.
  • Borrowers with the lowest amount of debt are more likely to be in default because their career prospects tend to be less lucrative.
  • 14% of students with college educated parents dropped out of school in the first three years compared to nearly one-third of first generation college students.
  • Dropping out doesn’t drop your debt — between 2015 - 2016, 3.9 million students with student loan debt dropped out of school.

What You Need To Do

  • Remember that your co-signer’s credit score will impact your interest rate. A lower credit score means a higher interest rate. Consider this before choosing a co-signer and when making a decision after the fact about releasing a co-signer.
  • Focus on federal loans over private loans. Federal loans have the opportunities for income-based repayment and public service forgiveness that private loans don’t offer.
  • Search and apply for first generation college student scholarships.
  • Do all loan applications at once to avoid multiple hard pulls on your credit that can also lower your credit score. The same goes for a loan refinance.
  • Know your rights — if you have federal student loans, you may be eligible for income-based repayments that minimize your monthly bill. Data shows that 51% of borrowers could be taking advantage of such programs but only 15% are doing so.
  • Advocate for more laws, such as income-driven repayment, that support students.


Go Deeper


The impact of student loan debt can actually be mapped. There is a direct correlation between average household student loan balances and student loan delinquency, and household income. Read this article and view the interactive elements to learn more about how unequitable the debt crisis really is.


Then on a lighter note, check out these letters from first generation grads to their parents.