An Exploration into the Role of Social Trust as a Mediating Influence in Low-Income Latino/a College Financing Decisions

• Published in: Center for Enrollment Research, Policy, and Practice
• Main Authors: McDonough, Patricia, Calderone, Shannon
• Format: Report
• Language: English
• Published: Center for Enrollment Research, Policy, and Practice 18.02.2010
• Subjects: Costs; Cultural Influences; Debt (Financial); Ethnic Groups; Federal Aid; Focus Groups; High School Seniors; High School Students; Higher Education; Hispanic American Students; Interviews; Low Income Groups; Parent Attitudes; Paying for College; Public Policy; Qualitative Research; Risk; Social Influences; State Aid; Student Attitudes; Student Financial Aid; Student Loan Programs; Trust (Psychology)

In the last forty years, federal and state financial aid policy has fundamentally shifted the way in which students and families finance college costs. Whereas grants once served an important function in equalizing college opportunity, loans are now considered a key lever against escalating postsecondary costs (McPherson and Shapiro, 1998). This reliance on loans as an essential aid tool makes the problem of debt aversion among low income people of color a critical challenge to postsecondary opportunity. Latinos/as, in particular, have been the most reticent about postsecondary borrowing among all racial/ethnic groups. This qualitative study builds upon a burgeoning body of work that focuses on the sociocultural understandings of college financing, affordability, and debt. This sociocultural approach emphasizes the variability of culture, social ties, and individual meaning applied to the ways in which individuals think about and construct meaning around money decisions. This qualitative study extends this sociocultural discussion to include the role of "social trust," defined as the capacity to place trust in the bureaucratic "other," as well as a focus on how low-income Latino/a students think about borrowing and debt. Just as research on consumption has long held trust to be a mitigating factor in purchasing deliberations, so too should it be considered in the context of college financing decisions. To this end, this study focuses on the loan and borrowing perceptions of 112 Latino/a high school juniors and seniors and 48 Latino parents and their concerns related to, among other things, college costs, financial aid, loans, and perceived risk. The authors' preliminary findings suggest that social trust does, in fact, play an important role in how these students and parents think about postsecondary borrowing, how they internalize information received from various sources, and the impact of trust levels on projected borrowing behaviors. To this end, this study suggests that postsecondary borrowing (and aversion) should be conceived, in part, as a nuanced expression of generalized social trust and threshold for assumed risk. A bibliography is included. (Contains 1 footnote.)