Ambiguity of the Student Loan Process: Reflections of Dallas College Alumni

​​​​Ex​ecutive Summary

In this qualitative study on the student debt experience among Dallas College graduates, the Research Institute conducted focus groups with five graduates and an interview with a returnee to investigate their perceptions of and experiences in their student loan journey and to assess the impact of student debt on their current and future financial well-being. Overall, clarity in educational direction, the quality of advising received on financial aid and student loans, and awareness of the adverse effects of too much debt are the primary determinants of participants’ ability to repay their student debt and foresee long run economic well-being. Career choices and associated earnings potential also affect participants’ perceptions of future financial circumstances and upward mobility. While the individuals in the analysis anticipate that the debt invested in their education—which they expect to pay off over time—will provide financial returns over the course of their careers, they generally do not envision building wealth through their incomes alone.


This qualitative research is part of a larger mixed methods study on student debt at Dallas College and is a case study utilizing focus groups and an interview with a subset of the alumni who participated in an initial survey. The Dallas College Student Loan Debt Survey investigated alumni’s perceptions of their student loan debt, including the costs and sacrifices incurred from taking on debt in relation to the associated returns, experiences in their student loan journey, and their ability to repay their debt and secure their financial future. The survey’s population of focus was all Dallas College alumni enrolled in at least one credit-bearing class between the academic years 2009-2010 and 2019-2020 who were also loan recipients at the College; the six participants in this qualitative study completed the survey and expressed interest in further contributing their viewpoints. The intent of this mixed methods research is to examine the distribution of debt among Dallas College completers and non-completers and across various demographics, as well as the effect debt has had on alumni’s financial well-being.

The aim of this case study is to examine the unique experiences with the student loan process of six survey respondents—all of whom are first-generation, minoritized students—with the goal of improving education related to student loans and financial aid for students and staff in secondary and postsecondary institutions. Implications and recommendations from this research (highlighted in the final section of the brief) are applicable to not only Dallas College and Dallas-area high schools, but also to institutional practices and polices within the broader higher education space. Conclusions from the qualitative analysis are derived through an inductive and thematic analytical approach to determine emerging paradigms, patterns of behavior, and outcomes among study participants. Findings suggest gaps in debt literacy and knowledge of the college financial aid process among alumni. Findings also indicate that differences in financial and debt literacy and clarity in educational direction impact individuals’ financial health and capacity to repay loans.

Contextualizing the Effects of Student Loan Debt

Traversing the student loan journey is, at best, an ambiguous process for those who do not receive financial socialization and/or debt literacy education through educational institutions, qualified advisors, and knowledgeable members within their primary social group. From submitting federal financial aid documents, to making decisions about financial planning and budgeting to ensure that loan balances are paid down, many first-generation and minoritized students in particular, without mentorship from a parent, advisor, or other individual with similar experiences, endure the student debt process with stress, confusion, and great uncertainty. Research on disparities in student debt outcomes indicate that while family background and financial socialization influence the status of having student loan debt and the amount of debt held, dependency status has a more significant effect on these outcomes. For instance, Black students, who were more likely to be financially independent than White students and receive considerably lower amounts of family financial support, carried a greater financial burden of student loan debt in comparison to White students, even though they were less likely to attend college (Kim et al., 2017). Kakar et al. (2019) examined the effects of student loan debt on the wealth of U.S. households after the 2008 recession using data from 2016 Survey of Consumer Finances and determined that the mean 2016 wealth for households with no outstanding student debt was more than four times higher than households with student debt. The relative burden of student loans was much greater for those at the lowest quintile of the income distribution than those at the highest quintile of the income distribution, and differences in student loan debt contributed to 5% of the Black-White wealth gap.

Research has also revealed that age and degree completion status of student loan holders are correlated with individuals’ financial capacity and competence. Using survey data from the 2015 U.S. National Financial Capability Study, Xiao et al. (2020) compared self-reported financial behavior and financial knowledge of student loan holders who are current college students, completers, and non-completers based on a series of indicators, including underspending, emergency saving, proficiency in calculating retirement need, and knowledge of interest, inflation, and time value of money. Their findings suggest that college graduates were more likely to perform desirable money management behaviors than college stop-outs and enrollees. While more positive financial capability among completers with student debt is encouraging, the burden of debt is, nonetheless, a critical determinant of employment decisions, household formation, home ownership, wealth building, and economic mobility. One study (Velez & Bentz, 2019) used interview and IPEDS data from NCES and Census Bureau data from 2008 to 2012 to assess the effects of student loan debt on post-baccalaureate outcomes using an instrumental variable and two-stage least squares approach. Findings highlight statistically significant effects for the following relationships: borrowers with higher student loan debt chose different (higher-paying) jobs than they would have otherwise, delayed marriage (both men and women; both independent and dependent graduates), delayed having children (women only), and had lower levels of net worth, even as it was related to higher earnings; the effect of higher debt on home ownership, while negative, was not statistically significant across any demographic measures. Frotman (2018) contended that both declines in household formation and home ownership are being driven by student debt, which creates barriers to economic mobility for borrowers across the country, particularly among the population aged 30 and younger; as an example, 360,000 fewer homes were purchased by student debt holders in this age group in the late 2010s than in the early 2000s.

Another subset of the literature on student loan debt highlights the mixed effects of financial education in the classrooms of undergraduate and graduate programs, indicating that while instruction on debt literacy and financial planning restored some sense of agency and mitigated some stress about future financial well-being among borrowers, such knowledge did not reduce their borrowing and spending behaviors, despite intentions to do so. Based on students’ feedback, the most immediate behavioral changes were an effort to work more to earn more, to take more ownership of one’s financial situation by seeking financial counseling, and to take on more financial responsibility for one’s educational costs to assuage the burden on parents (Garrett et al., 2022; Perkins et al., 2016). The studies imply that in order to effectively lower students’ debt levels and ensure best practices for debt management, preemptive education on debt and finances is necessary prior to students’ enrollment in student loan programs.

Findings from the present study resonate with the conclusions from the existing literature and also demonstrate new insights on the relationship between student loan debt and financial responsibility, credential completion, and occupational choices.


An original questionnaire was designed to steer the semi-structured focus groups and one interview with Dallas College alumni and contained questions on the following: degree(s) pursued; changes in degree or program of study; if the amount of student loan debt affected credential completion; if participants felt comfortable accepting student loans; if they were provided guidance from their high school or college(s) on how to manage and spend the loans; repayment plans and progress on paying down debt; barriers faced in repayment; savings; participants’ capacity to handle unexpected and significant expenses; and their ability to build wealth and secure their financial future. Five alumni partook in two focus group sessions, and one participated in an interview. Random selection was not used to determine the participants; individuals self-selected into the study, which indicates the conclusions derived from the research are potentially biased toward a subset of student debt holders at Dallas College and are not generalizable. Nevertheless, the research provides a rich, contextualized, and nuanced understanding of the student loan debt experience through an in-depth study of particular cases.

Due to the exploratory nature of the study, a thematic analysis through inductive coding was used to analyze the focus group and interview transcripts. This ground-up approach does not limit the data based on a predetermined set of codes, but rather allows narratives and theories to emerge from the raw data as codes are derived from the data and organized into motifs and themes. Three specific coding methods—descriptive, structural, and values coding—were used in the first phase coding of all the transcripts, from which themes and sub-themes were created. The findings from the data analysis are presented in narrative, anecdotal, and in quantified forms. Quantifying the number of times themes and sub-themes were discussed and identifying the number of participants who mentioned a particular theme or sub-theme underscore the topics most salient to the participants. Key implications are discussed with supporting quotes from the study participants, and overall conclusions and recommendations to improve student loan decisions and experiences for borrowers are provided in the following analysis.


General Characteristics of Participants and Profiles

The six, self-selected participants in this study expressed interest in sharing their experiences and perceptions about their student loan journey through the Dallas College Student Loan Debt Survey study conducted before these focus groups and interview. A summary of their student, employment, and debt characteristics and individual profiles are provided in Figure 1.

Figure 1: Profile of Participants

Text of this image can be found below.  

Borrower 1

Borrower 1 is an adult learner (defined in this analysis as one who enters college after age 25) who completed two associate degrees from Dallas College—one in education/teaching and another in business management—with an intent to utilize skills from both areas in her career. In addition to working full-time at Dallas College, she is currently pursuing a bachelor’s degree at a private, for-profit university. Having exhausted grants from her financial aid for her first credential at Dallas College, which she partially self-funded, she accepted loans to fund her second credential as well as her bachelor’s degree. She accepted her loans with caution, skeptical toward the interest attached to the loans, and she only took out the amount she needed to cover tuition and fees. At this time, she is making payments toward her Dallas College loan, and her current overall loan amount totals approximately $10,000. Despite assisting her son with his college costs, she has charted a solid plan to complete her baccalaureate degree and to pay off her entire loan balance by 2024.

Borrower 2

Borrower 2 is an adult learner who began her postsecondary career at Dallas College. Entering in her 30s and employed full-time when she came to the College, her nebulous goal to attain a college credential without direction or an identified program of study frequently led her to enroll in “random” courses to complete as many credits as possible. She struggled to balance school and work, fell behind in classes, stopped out of Dallas College, and paused her education for several years due to a lack of clarity in her educational pathway. After gaining clarity in her intents and interests, she returned to school at a private, for-profit university, in which she is currently enrolled. Given that there have not been interruptions in her full-time employment status, she was unconcerned about accepting the $2,500 in loans she took out while at Dallas College and admitted she fails to remember she has a student loan from Dallas College. While her total student debt is unknown, she receives some tuition assistance from her employer and feels confident she can effortlessly pay off her debt when she begins repayments after the pandemic freeze on student loan repayment is lifted.

Borrower 3

Borrower 3 established a career in a mid-sized accounting firm in her 20s, working up from an entry-level clerk to a manager before pursuing her college dreams. When she entered Dallas College in her 30s as an adult learner, she came with an open mind to learn, grow, and pursue a passion degree related to the skills she developed in her 10-year accounting career, but not in the field itself, which she described as “high-paying” but “unsatisfying.” In the process of completing her associate degree at Dallas College, an undergraduate degree at a public state university, and a master’s degree at a private, non-profit university, she intentionally selected the least expensive institutions to reduce her student debt burden—a decision that was also informed by her awareness of her salary growth both in her current occupation and in a potential job related to her education in the communications field. Knowing school was going to be a considerable expense, she allowed some time between degrees to reevaluate her direction and avoid misusing time and money. Her total student loan debt across all degrees is $55,000. By contributing to a monthly savings fund for her student loans, she does not worry about her capacity to pay off her debt over time; however, she predicts loan payments in addition to unforeseen expenses such as medical bills or the rising cost of rent could put a strain on her finances.

Borrower 4

Borrower 4 is an adult learner who believed she had clarity in her educational direction when she arrived at Dallas College well into her 30s but switched pathways from an associate degree in construction management to an associate degree in substance use treatment to an Associate of Arts with the intent to transfer to a four-year institution. After stopping out of her first credential program, she took a five-year hiatus before returning to Dallas College. This time, she became involved in extracurriculars, served as a peer mentor at Dallas College, and was inducted into an honor society—all with the hopes of identifying her true passions and pathway. She realized she wanted to further her education beyond the associate degree and earned a transfer scholarship to a four-year public state institution to complete her bachelor’s degree in social work. She currently has two semesters remaining in the master’s program in social work at the same university, which she selected based on the relatively low cost in comparison so other area universities, and she holds a running student loan debt of $34,000. She funded her associate and bachelor’s degrees through Pell grants and subsidized loans, and her master’s degree through loans only. She was aware student loans accrued interest and financially planned for the master’s degree, knowing that Pell grants would not be offered and that a job in social work would not pay a very high salary. Currently, she is paying down a subsidized loan from her undergraduate degree that accrued interest. With her spouse’s guidance and financial support, she is confident in managing her overall debt but feels some anxiety about the repayment experience and the limitations of her future salary.

Borrower 5

Borrower 5 is a first-time-in-college, traditional (defined here as one who enters college at age 25 or younger) student who entered Dallas College through the Promise program immediately after high school graduation. She is employed part-time and financially independent from her parents. Her initial pathway was to study criminal justice with the intent of transferring to a four-year institution after two years; however, after developing an interest in psychology through an introductory course with a “really great professor,” she switched her degree plan to an Associate of Science and transferred to a local four-year university to complete a bachelor’s degree in psychology after five semesters at Dallas College. The shift to online classes during the pandemic delayed her plan to complete the associate degree within two years, leading her to transfer to the university in the spring semester as opposed to the fall. Since her family did not have any knowledge about student loans, she relied on her high school counselors as well as the financial aid office at a Dallas College campus to provide answers for her questions about loan types. Erroneous decisions with student loans began in her first semester of college due to poor advising and limited information. Despite not needing to borrow loans as a Promise student, she was still awarded a student loan for her first year at Dallas College, which she unknowingly accepted; she shared that neither her high school counselors nor the advisors at Dallas College clarified that the Promise program would cover her tuition. She feels fortunate she was able to quickly pay off the loan with her Promise funding, but she found less luck with another uninformed acceptance of a student loan while she transitioned to university. Not knowing that the Promise funding transferred to another institution during the fall semester only, her spring transfer compelled her to take a loan to cover tuition costs—a loan that was avoidable had she waited until fall to transfer. She learned about the policy through an advisor at her university after accepting admission and enrolling in courses. The subsidized loan amount was $5,500, and while she is not afraid of its effects on her future educational and career goals, she felt quite disheartened to not have received proper guidance on the funding process of the Promise program.

Borrower 6

Also a first-time-in-college student who enrolled in Dallas College after graduating high school, Borrower 6 attended a low-income, Dallas ISD high school that she describes as a place that “colleges were either too afraid to visit or did not think would have students who wanted to go to college.” She and some of her friends did want to go; she chose a more affordable path through community college, while her friends enrolled in four-year schools. The one piece of information she received from a high school teacher regarding the interest attached to student loans was inaccurate, as she was told some federal loan programs did not accrue interest. With the goal of becoming a teacher, she entered the Associate of Applied Science program in Early Childhood Education in 2016, taking on full- and part-time course loads based on her capacity as a mom of two young children. She paused her education in 2020 when she felt overwhelmed in an online class environment, resumed classes the following year, and has 30 semester credit hours remaining until degree completion. Using grants and loans to fund her courses and education-related expenses such as laptops and gas for commuting to campus, she accepted all the loans awarded to her due to need; she currently holds $3,500 to $3,800 in student debt, which will grow as she completes her credential. As a single-income, low-income household, the family lives on a stringent monthly budget that does not allow for indulgences and has a small amount of savings. She plans to work as a teaching assistant in an inner-city school in hopes of qualifying for public service loan forgiveness and cannot afford a bachelor’s degree at this time. Unable to anticipate the amount of her monthly repayments, she is uncertain about her ability to handle the cost and does not know which repayment plan will be best for her circumstances.

Thematic Analysis

When sharing their own experiences in the student loan journey, the most reoccurring motifs discussed in the focus groups and interview were details on participants’ educational direction and intent (19.2% of all themes mentioned), their awareness of the negative effects of student loans (18.4%), whether or not schools and colleges provided quality guidance on the financial aid and student loan process (17.5%), and the anticipated impact of student debt on personal expenses (11.1%; see Figure 2). The frequencies of these specific themes denote the extent to which they most significantly contributed to participants’ borrowing behavior, how they used the loan money, and their attitude toward and perception of their debt in relation to their economic well-being.

Figure 2: Themes, and Their Respective Proportions of All Themes, Discussed by Participants

Text of this image can be found below.  

Through a more granular examination of the sub-themes associated with the primary themes of the case study (when applicable; see Table A1), we see that clarity in educational direction, being aware of the negative effects of student loans, and not receiving proper institutional guidance were mentioned considerably more times than ambiguity in educational direction, being unaware of the negative effects of student loans, and receiving proper institutional guidance. Having concern in the ability to meet expenses due to repayments was stated slightly more than not having concern, and not making progress on repayments was mentioned more times than making progress. Current ability to build wealth was indicated only once, while anticipation of future financial security was mentioned four times; two instances of current inability to build wealth were stated. Importantly, the motif on early financial literacy and student loan education was mentioned and emphasized by all six participants. In the following section, conclusions and implications from the thematic findings are summarized and supported with participants’ voices.

Implications from Thematic Analysis

Unique Challenges (and Strengths) of First-Generation and Low-Income Students

It is an extreme challenge for first-generation students to navigate the financial aid and student loan landscape and to have realistic perceptions of their early-career earnings potential with a chosen degree or credential. Such difficulty is intensified by the perceived lack of information, misinformation, and/or contradictory information provided by high school counselors and teachers as well as financial aid offices and advisors at colleges. An added difficulty is the very limited visitations and recruitment efforts from colleges and universities at high schools that are generally deemed to not produce college-ready students. Study participants elaborated on these notions.

"I am first generation college graduate and being that I started going well into my 30s, I still didn't know enough [about loans]…All three different schools I went to, one private [and two] public, can do much better in being more informative. I think that leaving it up to students, no matter our age, is a crappy job. I was very disappointed about how hard it was for me to get information, how I had to beat down doors in order to get someone to talk to me…having to take off of work…or spend my lunch hour waiting to speak to someone at Brookhaven to get mediocre answers at best. As an informed adult and having done a ton of research online, I [asked] questions they weren't prepared to answer…because they were expecting a young college student or high school student to walk in. I was very disappointed at the answers I would get and how different the answers would be based on who I talked to. I could speak to one counselor one day who's new and was there for three or four years and another counselor another day who had been there for 20 years,…and I would get inconsistent answers." – Borrower 3

“Unfortunately, I didn't know that [Promise funding] didn't transfer over if you transferred in the spring semester, which is what I did. I transferred in the spring to [university]. So, I found out [after] I was already accepted and enrolled in everything. So, unfortunately, last spring I ended up getting a subsidized loan from [the university]. I found that out too late…I was already admitted and enrolled and ready to start. And since I'm paying it all myself and managing college all by myself, the loan was my only option to pay the balance of my tuition.” – Borrower 5

“Colleges and counselors are a bit misleading to graduates by telling them you can make this much money in a career and [they’re] told the top [salary] amounts, but they don’t understand that [they] have to work and get experience. [The] degree is the bare minimum to get hired,…get experience, and to move up in the ranks. [There are] a lot of graduates who went from high school to college without any job experience [whom] I've interviewed to work for me, and they're wanting to make more than I make…because someone told them I have a degree.” – Borrower 3

Furthermore, lower-income students have increased needs to self-fund miscellaneous school-related expenses, including low-ticket items. The necessity to accept the maximum amount of student loans offered is more urgent for these students in comparison to more financially able students. One participant’s student loan expenditure serves as an example.

“I didn’t really read [my loan] papers over…I was like, 'I need the money for school’ and I was just accepting anything. I had to buy two laptops for school ‘cause one broke, and books…I tried to get them on Amazon for cheap as much as possible, but some you have get from the bookstore, and they cost a lot. I was buying scantrons, too, for my classes and school supplies like journals and binders. After we moved further away from Mountain View, I used the loans to put gas in my car because I was driving to Mountain View then. We only have one car, and it has some mechanical problems; once we had to use a little bit of the loan money for a repair.” – Borrower 6

The notion that students of low socioeconomic backgrounds often do not have the social capital to approach student loans with judiciousness and are enticed into exorbitant loan amounts based on perceptions of “free” cash does not always hold true. Implicit in such a belief is the misconception that disadvantaged students are deficient in managing their finances; at times, the opposite is true. Studies related to the financial well-being of young adults suggest that parents influence young adults’ financial attitudes and behaviors. Parents who explicitly instructed their children in day-to-day financial management (e.g., budgeting, paying bills on time, saving for emergencies) were found to have a greater influence on their children’s financial behaviors and habits than in families with no such instruction. However, this was not the case with more procedural financial matters (e.g., the student loan process, FAFSA forms), suggesting that parents may be passing along finance-related attitudes and life skills but are not as effective in instruction on more technical procedures (Jorgensen & Savla, 2010; Kim et al., 2012). Students from disadvantaged backgrounds may not receive knowledge of college financing from their families, but they often learn frugality, budgeting, and prioritizing money through the examples of their family members, which prepares them to be financially responsible and independent as young adults. One alumna shared that her family’s financial challenges shaped her disciplined money management habits.

“I've watched my parents struggle all my life…We've always been low-income. I’ve always seen them calculate, ‘What are we not paying this month?…What are we going to prioritize?’ So, I definitely made it a goal for myself to be careful with money…and always try to have enough for everything…I'm trying to be as smart as I can now when I'm young…like not spending money on crazy things that might not be necessary…so it doesn't affect my future.” – Borrower 5

Effect of Clarity in Educational Direction and Loan Terms on Adult Learners

Adult learners in the case study demonstrated more robust knowledge of the negative effects of student loans than traditional learners, and they had more awareness about the student loan process overall. Clarity in educational direction and intent and an understanding of loan stipulations were determinants of their repayment status and behaviors as well as their perceptions of their future financial well-being (Figure 3).

Figure 3: Pathway Towards a Healthy Financial Future for Adult Learners

Text of this image can be found below.  

Note: All adult learners in the analysis have completed their programs or course sequences at Dallas College and are currently enrolled at 4-year institutions.

Although alumni who were/are adult learners did not receive institutional guidance on student loans and debt when they began their college education, they nevertheless had a general understanding of the pitfalls and dangers of loans and accumulating excessive debt. They also demonstrated foresight about their potential earnings after degree completion and the amount of monthly loan payments they can comfortably afford based on their future incomes.

“I didn't receive any information regarding laws [of student loans]; [what I know] is just from life experience and being in the education environment and watching others. And I knew that I didn't want a huge burden for myself—listening to the talks of having these huge loans and years down the road, they're still paying on it. And that was part of my skepticism of even accepting my loans initially. So, no, even when I was accepting the loans, the only information given was that, ‘Oh, you're eligible for this, and your payments will start on this date once you complete.’ Other than that, there was no information given.” – Borrower 1

“I don't recall being educated on any real level or getting much info about details of the loan programs from Dallas College and when I was in high school trying to go to college, but I had a general idea about how too much student debt can affect you. When I went back to school at the University of Phoenix, they were incredibly thorough…they almost had a class within their financial aid department about student loans…on every single facet of what it meant to take the loans. There are videos and assessments you have to watch and complete before even being able to accept the loans.” – Borrower 2

“Student loans were one of the big things that was on my mind because I was thinking, while I'm in college, I'm not accruing this interest, but yet, I kind of am. I'm currently in the master’s program, and I didn't realize until I got my bachelor’s that…there's no Pell Grant available for the master’s. I had to look at the tuition costs between my different options and…only get the amount of student loans to cover the tuition…and [an] additional $200. My master’s is in social work, and it's not the best-paying position. So I realized [I had] to be realistic—once I graduate, what's my salary going to look like versus the amount of money that I'm going to have to pay on a monthly basis?” – Borrower 4

“I've completed my master’s degree since enrolling at Brookhaven (DCCCD), and I knew that school was going to be expensive. That's why I waited so long to go back and again wanted to make sure I pick something that I really was passionate about. So I took the course of [not wasting] my money on something I don't want to do or do it because I hope to get a job that pays more. Once I determined that I liked and was very passionate about communication, that was the path I chose. So, then it was a matter of [finding a program] that was online, affordable, and in communication. My coworkers have a master's degree, and [they] got that masters in something [they] don't even care about and…have like $150,000 in debt, and their salary isn't ever going pay that off…So for me, it was saying I need to make sure that I'm selecting schools that are going to be as affordable as possible…because I just know how jobs work and getting raises and things of that nature. I know how that process works.” – Borrower 3

Nevertheless, those who had a divergent pathway to a chosen program of study did not have a tangible repayment strategy and timeline and exhibited less confidence in their future economic well-being.

“I started [college] over a decade ago…and at the time I did not know exactly what I wanted to do. And unfortunately, I was working, so I didn't finish…like I got overwhelmed….I didn't even get to the point where I [had] clarity about what I wanted to do through [my] studies. Now that I'm older, I'm more clear about what I would like to do, but at the time I wasn't so clear. I just wanted some educational credits to get me started. I was just taking core classes…I was so far behind that [advisors] were telling me there is a certain level of basics that will be beneficial to you no matter what you ultimately study…so I just wanted to kind of get those basics built up…I can't even remember at this time what I really wanted to do, but I wish I'd had a little more clarity back then.” – Borrower 2

As an example of the connection between clarity in educational goals and economic well-being, Borrower 1 knew the degrees she wished to obtain, maintains awareness of her student loan balance, and began repayments despite not knowing her repayment plan.

“I don't know if my plan is an IDR or any of the other acronyms, but my goal was to pay at least $25 to $50 more than the minimum that they were asking to try to get it paid off at the time of the stoppage [freeze]. I had about $2,500 remaining on [the Dallas College loan]. Since then I accepted $6,500 from the University of Phoenix, so those payments haven't started yet.” – Borrower 1

She assessed that her current ability to work towards financial security was moderate.

“Build wealth? Somewhat. I have a kid in college, but I do have a decent right now, we’ll say things are average.” – Borrower 1

Contrastingly, Borrower 2 gained greater clarity in educational intent after she reentered higher education, does not keep frequent tabs on her student loans, and has not begun repayments.

“I remember the amount [Dallas College] gave me was very minimal, probably like $2,500 or something. And I remember seeing the payment plan and just thinking, ‘That's, you know, that's going to be easy to pay off.’ So, I don't remember any of the details, which is interesting because they send me details every so often to the point where I'm like, ‘Oh, I forgot I had a student loan.’ It looked quite feasible because the interest is always really low right now. So, it didn't seem to be anything that I wouldn't be able to comfortably make progress on once I start paying it.” – Borrower 2

She did not comment on her current ability to build wealth but shared that she has gained maturity on financial matters at this stage of her life and feels she can now begin to work towards financial security.

“I think for me, it’s all been about just growing and being more mature, learning from mistakes—things of that nature. I am now at a place where I feel like I know what to do [to build wealth] and how to do it…I think that pathway is clear for me.” – Borrower 2

Effects of Quality of Student Loan Information Received on Traditional Students

While traditional students in the case study had clear educational pathways and persisted in their selected degree programs, they demonstrated very limited knowledge of the financial aid process and the stipulations attached to student loans. For these women, guidance, mentorship, and accurate information were critical determinants for not only accepting the loans awarded to them, but how much to accept. Proper institutional guidance combined with the effects of financial strain affected their ability to determine their repayment capacity and to predict the feasibility of a future savings fund (Figure 4).

Figure 4: Pathway Towards a Healthy Financial Future for Traditional Learners

Text of this image can be found below.  

Note: One student completed her Dallas College program of study and is currently enrolled at a 4-year institution; another student was on hiatus from Dallas College for a couple of years and recently returned to complete a credential.

The following reflections from participants highlight a lack of understanding about the federal financial aid application and award process, as well as unfamiliarity with the meanings and functions of different loan types. The examples also emphasize the lack of assistance in, and blatant misinformation about, these procedures from advisors and teachers.

“In high school, my senior year, they would do these different workshops about FAFSA, but they were always the same repetitive information…They would never go into depth and show what you have to do step by step and just explain what the FAFSA is and when you need to complete it by. A lot us were scared that we would get a letter from the IRS in case we filled it out wrong because we had no idea what we were doing as 17-/18-year-olds. We shouldn’t be trusted to complete forms that are with the government. [Then] looking at my financial aid awards and seeing all that money, I honestly didn’t trust myself enough to make those decisions [on what to accept and not accept] because I felt like I was not informed enough, and my parents obviously didn't know what they meant or anything.” – Borrower 5

“When I was in high school, my former band teacher told me about two different loans—one you have to pay back with interest and the other one (I don't know if it's true) you don't have to pay any interest back, but you do have to pay what you borrowed, and you have to pay it back a few years after you graduate. I was kind of iffy because I don’t have anybody telling me about college or loans. I was educating myself about that with Google since my parents and nobody in my family went to college and didn’t have any of that knowledge. I had to depend on my former teachers from high school, but I was already out of high school, so I would go back to ask questions. But I have remembered that information, and I'm not sure if it's true.” – Borrower 6

One alumna who entered Dallas College through a program that compensated tuition costs after grants and scholarships unnecessarily accepted a loan awarded to her because she was not advised against doing so.

“Student loans were always in the back of my mind [while] getting into college fresh out of high school. I'm first-generation, so no one in my family knew what student loans even were. So, I kind of had to rely on my counselor's office…[and] Brookhaven’s…financial aid office. I would bother them every now and then asking like, ‘Why is the loan called a subsidized loan?’ And things like that. So, I actually ended up accepting a loan my first semester because I just didn't know any better, to be honest…but thankfully I was part of the Dallas Promise from high school, so I was lucky enough to get enough money and to repay that loan like super quick before it even did anything because I realized I didn't need it…I just accepted it because I saw it in my financial aid package, and I just didn't know what it meant.” – Borrower 5

Differences in the confidence to repay loans and in the expectation to be financially stable after degree attainment were evident between the two traditional learners; the participant in greater financial stress expressed more insecurity about her future economic circumstances.

“Since I'm barely finishing up my undergrad, I'm proud to say that I do have a savings. I think most people in my age group probably already spent their savings. But I do have a good amount of money saved just for anything that might happen…any emergencies…or just for the future.” – Borrower 5

“If the loan [repayment amount] is almost $200 a month, I think it would affect [my ability] to pay back for school now…like we’ll have to take that from our savings or from our rent money. But if it was something less than that, I don’t think it’ll be too hard.” – Borrower 6

Impacts of College Financing in Conjunction with Attainment on Students’ Returns on Investment

Students who proactively plan to borrow student loans with the intent to complete their degrees gain the best monetary returns; it is in this situation that their student debt is most likely to transform into an investment, and the prospect of building intergenerational wealth increases. In other words, students benefit most when they have a holistic strategy for college financing and degree attainment.

“I think the biggest tragedy of the whole loan [phenomenon] is someone accepting the loans, not knowing the ramifications and the impact it's going to have on them financially and how it can affect their livelihood as well as their credit, is when they take all these loans and they never obtain a degree….Now they're not even in a position to make a living off of the money from the degree that they could have earned because they’ve taken all these loans and foolishly didn't make any use of them…now they have this debt and no degree and no plan to repay it back. I’ve seen so many cases of this situation working with students at Dallas College.” – Borrower 1

Despite their experience, adult learners are often lost while navigating higher education; financial literacy and educational planning for adult students, in the way that it is provided to their traditional counterparts, is a great necessity. Tailored programming around academics and student supports, such as focused approaches on how to fund a degree in a way that works for the working adult, can increase the likelihood of degree completion and yield greater financial well-being for adult learners.

“Much more financial education needs to be given in high school and also to people who are adults. I think that there needs to be a lot more programs that focus on adults who are already working, that work around their schedules, understand what it takes to be a working adult who's trying to get an education, and know how to help them pay for it…There needs to be a lot more of that for adults, as well, who need to finish their education, but they need to do it in a way that works with an adult life.” – Borrower 2

Some alumni recognize that their ability to build wealth depends on both the amount of debt they hold as well as their career choices and the earnings their occupations will provide.

“If I [were] just looking at my income and everything independently, no—I would not be able to build any sort of wealth with my salary as a social worker. With my spouse, it is, hopefully, attainable.” – Borrower 4

“I'm not married; I don't have children; and I have a career that I feel stuck in and don't thoroughly enjoy. To pursue a career in something I want to do like teach or do social work—even if those careers did help pay off the student loans—the salaries just aren't something [from which] one builds wealth; you survive if you're lucky. You may have a little bit extra to save for a vacation once a year…[or] have a little extra to go out to a fancier dinner for a special occasion, but that is not wealth at all…it’s definitely not having enough to where you have something to leave for the generation after you.” – Borrower 3

Need for Greater Debt Literacy for All Ages

High schools, community colleges, and four-year universities must increase their commitment to providing in-depth financial and debt literacy education. This begins with training school counselors and advisors with the proper information, data, and tools to guide students to make smart financial decisions. Through extensive and accurate knowledge of financial aid and student loan processes, regulations, and outcomes, advisors can steer students toward planning college financing judiciously. In turn, this may indirectly urge students to set a concrete educational pathway, thereby reducing any additional time spent to complete a credential and increase attainment rates.

“There should be an exam—not a fast-forward thing where there are clicks and buttons—but a literal exam where they give each student, for every year that they go [to an institution], a test that says in this scenario, here are these three individuals from these three different backgrounds and this is their loan; walk us through what that's going to look like for them.” – Borrower 5

“All educational institutions can do better in making sure students understand loans and financial aid packages…giving them as much information as possible and not handing them a packet or giving them a website, but explaining it to them, explaining it to their families, and making sure they understand what this really looks like from A to Z because I'm done with school and I'm still learning how student loans work and how this is all going to play out for me.” – Borrower 3

“Communication from different counselors did improve somewhat during the two years that I was at Eastfield…being a peer mentor, I would hear complaints from other students [about] how they didn't truly understand how the whole loan process worked. And I also worked with Promise students [and] they shared no one ever communicated to them how the whole process [was] going to work and what to expect. Even like a PowerPoint presentation that's very simple would be very beneficial to all students of all ages.” – Borrower 4

“We need that kind of education for students in high school about paying for college and actually encouraging students to go to community college more. If you can go to community college, get a good education, and then go to a university…you had a bit of life experience [and] a bit of college experience. You might recognize more fully what it might take to live independently and how your student loans are going to impact that….not to mention you may be able to learn a little bit more about yourself and what you want to do in a community college space. You might make a much better decision about going to university knowing how expensive it is and asking yourself whether it's going to be worth it.” – Borrower 2

“It comes across as predatory…you're telling people, ‘Go talk to your parents, go talk to your family.’ A lot of my closest friends, their parents, don't speak English. They don't have those people [to talk to]. I didn't have anyone that I could go talk to. I was asking other working adults. I would be at this college waiting to talk to a counselor, and I would see someone like her [referring to a younger focus group participant], and I'm thinking, ‘Man, if I'm struggling and I've worked in finance and had bills and credit cards, and I’m confused, I could only imagine how confused that high school student who caught DART to go up [to the college] after school to ask their question was.’” –Borrower 3


Next Steps for Dallas College

Although most of the student loan borrowers examined in this research did not carry heavy debt burdens from their perspective, their experiences and insights reveal that most were, in some way, blindsided by the student loan market and the institutions that, indirectly and directly, delivered its business to them. Despite not having formal guidance in best practices to take on and manage student loans, those with more age and life experience were sufficiently aware of the consequences of debt. The younger participants, however, were less capable of contextualizing the ramifications of student debt, especially when prolonged. The experiences of both the traditional and adult learners illustrated in this case study call for a reevaluation of how counseling, advising, and financial aid offices at Dallas College and in local high schools inform, guide, and train students to approach college costs and financing. Advising practices must go beyond locating applications and reminding students of deadlines; advisors must be able to frame various funding options—including loans, grants, and scholarships—around a students’ unique circumstances and identify which aid sources are best suited for their needs and goals. Suggestions from the focus groups and interview also indicate that incoming students would immensely benefit from required, rigorous workshops that educate students on how to navigate financial aid and student loan processes—beginning with clearly understanding the award letter to recognizing ways in which one’s funding decisions in the present can impact their debt and financial outcomes many years after college completion. Building financial literacy education into both the onboarding/pre-enrollment phase and the core curriculum through required courses for all credential-seeking students could help ensure that most Dallas College students not only receive an education that offers a livable wage, but that they also develop the acumen to save and invest their earnings toward a financially secure future.

ROI and Upward Mobility Implications for Participants

The women in this case study—first-generation, minoritized, and from low socioeconomic backgrounds—generally do not find themselves in a position to accumulate financial assets and build meaningful, intergenerational wealth, despite having the capacity to pay their debts off over time (Figure 5). While nearly all the participants were certain that with the completion of their degrees, their earnings would increase and the debt invested in their education would provide some monetary returns over the course of their careers, they predicted their accrued wealth over a lifetime with notable caution.

Figure 5: Perceptions on Upward and Intergenerational Mobility

Text of this image can be found below.  

The Research Institute’s Return on Investment (ROI) estimates indicate that ROI for women and students from lower-income brackets is persistently lower than for men and students from higher-income brackets. The study also contends that another indicator of ROI is one’s choice of field, major, or program of study and its associated earnings potential. In line with those findings, the individuals in this study—the majority of whom are pursuing career fields with relatively lower-wage outcomes such as education, social work, and community engagement—foresaw themselves in the lower ranks of the ROI scale. None of the women were able to envision upward mobility solely based on their anticipated incomes because of salary caps in their chosen careers, but they showed confidence in accumulating a savings fund for unforeseen expenses. The cases at hand merely skim the multidimensional structural inequalities that persist intergenerationally for certain demographic groups in the United States—inequities that one individual’s college degree and salaried job alone cannot repair (Jerrim & Macmillan, 2015). Nevertheless, educational and socioeconomic outcomes for such students may improve with preemptive, institutional-level measures like those underscored below.

Policy Implications

Findings from the present study call for a greater necessity for K-12 and postsecondary institutions to adopt a comprehensive financial counseling approach that explains the true cost of attending college, relates the availability and workings of various sources of financial aid, assists with applying for financial aid and understanding the terms of the aid types awarded, and emphasizes the importance of early preparation to save for college. Counselors and advisors can also empower students by providing them an understanding of potential earnings in their pursued career fields, prospective short- and long-run financial returns from their chosen occupations, and estimates of the proportion of their expected income that will go towards loan repayments. Financial literacy education and planning can begin as early as elementary school and should continue into postsecondary; school counselors and college advisors must receive this education as well and stay current with policy changes. Research units within institutions may have the capacity to produce relevant interactive tools and actionable findings on financial aid and student debt trends, which can be utilized by those in student advisory roles.

Means through which current and future policies can decrease the student debt burden for more students include consumer-directed supervision of the student loan industry, holistic financial literacy and debt education, full disclosure about student loan types, and thorough explanations of various repayment methods. Policymakers must also investigate if there are ingrained biases in the delivery of financial literacy education in all sectors of education, beginning from public school districts through elite higher education institutions (Kakar et al., 2019; Kim et al., 2017; Shim et al., 2019). With improved policies and collaboration between the student loan market and educational institutions, student loan holders from marginalized backgrounds may achieve more equitable financial outcomes.

“When it comes to awarding loans, institutions need to understand that these are individual lives that are all separately impacted by the bigger financial goals of the schools and the banks…potentially forever. Everyone wants to leave something for their kids, whether it's their house or whatever it is…I’m not even talking about generational wealth…just something [that shows], ‘We didn't struggle for everything all the time.’ And when someone like [Borrower 5] at a young age makes that decision to take a loan—the fact that one person didn't tell her something could change the trajectory of her future. Set [those] like her up for success, so that her kids and her family are more educated, and the gap is lessened. It should get easier for each generation; it shouldn’t get harder.” – Borrower 3