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In Pursuit of the American Dream: Latino Students Face Troubling Barriers to College Success

Overrepresentation at predatory for-profit schools is a key reason Latino students are struggling to complete their college degrees.

Josue Perez, a 33-year-old security guard in Boston with dreams of being an entrepreneur, never managed to get a postsecondary degree. Around 2008, a few years after he’d graduated high school with “average” grades, he heard about the Everest Institute, then a subsidiary of the since-shuttered for-profit higher education company Corinthian Colleges, Inc. Perez, whose parents are from Puerto Rico, liked that the institute accepted students on a rolling basis throughout the year and offered an expedited path to getting a credential, promising to propel them “up the corporate ladder.” The info sessions had him sold: Perez enrolled in the nearby campus’s massage therapy program. After getting his certificate in less than a year, he’d be able to, say, build and own a spa business.

It wasn’t long before Perez started sensing something fishy about the institution. The campus — in a part of the city girded by prestigious, four-year colleges such as Boston College and Harvard — was little more than a run-down, five-story building, he said, recalling its unpredictable and filthy elevator.

But he saw that the building had training equipment — classrooms with dental hygiene chairs on one floor and medical assistant tools on another. He appreciated that his program assigned him an anatomy textbook and equipment, a “curriculum that made you feel like you were actually being trained for something.” Perez sought out the program assuming that he’d soon get to tap into the growing demand for massage therapy.

Perez powered through those 11 months, attending classes for eight hours a day, five days a week, and even receiving some honors. In the end, he chose not to cross the stage to receive his diploma but to stop by campus and retrieve the certificate at a later date.

But that degree never materialized. When Perez went to retrieve his certificate, he contends, various administrators “gave me the runaround,” claiming they had no evidence that he’d completed the course. Now, he was scrambling for work and on the hook for thousands in student loans for a course that, on paper, he never took. Perez defaulted on his payments. His checks — many of them from one-off jobs he secured through a temporary employment agency — were garnished, stripping him of an estimated $10,000 total.

At one point, Corinthian Colleges — the umbrella company that owned Everest Institute — operated more than 100 campuses throughout the U.S. and Canada, including the campus where Perez learned massage therapy. In 2015, facing ongoing legal threats by state and federal agencies, not to mention investigations by various jurisdictions dating to the mid-2000s into allegations of fraud, the for-profit behemoth filed for bankruptcy. Corinthian colleges had a decades-long track record of producing sky-high loan-default rates in some states, and there was evidence that Corinthian’s subsidiaries had misled vulnerable students, cheating them out of an education, according to various suits.

With the help of The Project on Predatory Student Lending lawyers, Perez’s loans are now under administrative forbearance, meaning he isn’t liable for the debt and will remain in good standing, at least until a decision is made on whether he’s eligible for forgiveness. The status means he’s unable to apply for a mortgage, however, or a car loan, but Perez tries not to dwell. “It was a very hard learning experience,” he said, although he explains he’s “more financially stable now — I know how to spend money.” His main goal is ensuring his future children won’t face the myriad obstacles he faced in his pursuit of a comfortable life.

A Growing Gap for Latinos

However, unless the college landscape dramatically changes, the outlook is worrisome. While Latino students like Perez account for a fifth of today’s U.S. undergraduates, and their enrollment is increasing at a faster rate than their white and Black peers, research shows many are struggling to finish their degrees. In fact, the gap between Latino students’ postsecondary completion rates and those of their white counterparts grew by six percentage points over the last quarter century, according to a 2017 report by the Georgetown University Center on Education and the Workforce.

Latino students’ overrepresentation at for-profit colleges like Everest Institute, where just one in five first-time, full-time undergrads get their degrees within six years, helps to explain this gap. Students of color are overrepresented at these institutions: Latino and Black students account for roughly half their populations.

However, many for-profit institutions fail to provide their students an education that guarantees them higher-paying jobs than they'd get without a degree, producing lower completion rates, greater debt levels, and higher default rates compared with nonprofit colleges and universities.

The Latino-focused advocacy organization UnidosUS has conducted robust research on students’ experiences at for-profit schools, including a study comparing the fates of Latino students who enrolled at nonprofits versus for-profits in the mid-2000s. Latino students at nonprofit institutions were nearly as likely as their peers at for-profits to take out a loan for attendance, the study showed — about 72 percent versus 76 percent. Yet students at for-profits were nearly four times more likely than those at nonprofits to default on those loans within 12 years.

With for-profit colleges offering such a bad return on investment, why are students still enrolling? For-profit institutions tend to market themselves as an appealing option for students with limited time and know-how, offering online, part-time coursework and a seamless application process. And Latino students face a number of systemic challenges that make them uniquely vulnerable to the recruitment tactics employed by for-profit colleges.

7 of 10

Latino students enrolling in college today who are first-generation

New Analysis from UnidosUS

Seven out of every 10 Latino students enrolling in college today are first-generation, according to new UnidosUS analysis. Many of them lack the financial resources and savvy needed to attend selective colleges, where the chances of completion are much higher than they are at open-access or for-profit schools. They also seldom have access to effective counseling and networks that many of their more-privileged peers enjoy. Latino students are “constantly changing their college-going decisions to make [higher education] more affordable,” says Janette Martinez, a Senior Policy and Research Analyst at Excelencia in Education, national initiative aimed at promoting Latino student success in higher education through evidence-based practices.

Research by UnidosUS shows that while Latino students tend to factor their families’ financial circumstances into their college decisions, language barriers and other obstacles make it difficult for their parents to understand their financial aid options. The Free Application for Federal Student Aid (FAFSA) itself can be overwhelming, its 100 questions causing confusion that can undermine the amount of financial aid they receive. UnidosUS Education Policy Analyst Amanda Martinez stressed that students are struggling “to figure out a federal system, a state system, external organizations, to communicate with their institution, and to figure out how to pay for college.”

'Journeying into the Unknown'

Having family members with different immigration statuses can further complicate matters, from privacy concerns to logistical challenges. Individuals who participated in UnidosUS-sponsored listening sessions described the process as “journeying into the unknown without adequate guidance and support to navigate on their own.”

Unidos’s Martinez echoed that sentiment: “It becomes a very lonely, isolated decision by students who are making different trade-offs by themselves, with little information or support,” she said. “Their families are giving them moral support but not technical support.”

It becomes a very lonely, isolated decision by students who are making different trade-offs by themselves, with little information or support.
Janette Martinez Senior Policy and Research Analyst at Excelencia in Education

For-profit colleges, according to higher education experts and racial justice advocates, tend to exploit these vulnerabilities. “For-profits do a good job of recruiting and doing outreach in communities where there are lots of people of color,” exploiting those people’s precarious circumstances, said Martinez. They hit on the “touchpoints,” promising to accommodate disadvantaged students’ schedules — their desire to get a degree while working and/or caring for their children — just to get them enrolled.

These predatory practices could end up not only crippling Latino students’ educational prospects, but stifling their communities’ economic and social mobility. White Americans benefit from the economic stability their predecessors gleaned from good jobs, the Georgetown University report suggests. Latino workers today, especially those who are the children of immigrants or immigrants themselves, tend to lack those benefits and the safety net they offer. Considering that the return on investment of a four-year degree has doubled since 1980, Latino students’ completion gap means they face stark obstacles in their pursuit of the American Dream.

Removing Barriers to Success

As part of its efforts to create more opportunities for the country’s Latino population, UnidosUS is working to remove barriers to postsecondary access, completion, and success. Many of their initiatives center on strengthening accountability when it comes to for-profit institutions through updates to the Higher Education Act, which hasn’t been reauthorized in more than a decade.

Recently the organization has, alongside a coalition of other advocacy groups, strived to reinstate the Obama-era gainful employment rule, which under the Higher Education Act required career-education institutions that receive financial aid and loans to “prepare students for gainful employment in a recognized occupation.” Last summer, the Trump administration rescinded the rule on the grounds that it discriminated against programs based on their tax status.

UnidosUS is also advocating for a restoration of the 85/15 rule, which would limit the share of revenue that for-profit colleges receive from federal aid, such as Pell grants, to 85 percent, and would create greater oversight of accreditors and the process by which they authorize institutions of higher education.

Protecting Hispanic students from financial exploitation is critical to improving their degree attainment rates, suggests Martinez.

COVID-19's Impact

But advocates worry the COVID-19 pandemic could stifle or even reverse progress. The crisis has wreaked havoc, both existential and economic, on communities of color. That devastation is pronounced for Latino workers, especially Latina women; altogether, the Latino unemployment rate peaked at nearly 19 percent in April, up from less than 5 percent two months prior, a recent Pew survey found. Meanwhile, roughly two in three Hispanic students struggled to pay for basic needs in late spring, according to a study conducted by the Hope Center for College, Community, and Justice.

Polling data indicate the pandemic could force scores of Latino students to delay their college educations, while potentially compelling many others, according experts such as UnidosUs’s Martinez, into the for-profit space.

Martinez worries that for-profit colleges — which are better-versed in online education than more traditional nonprofit institutions — “may be successful in recruiting and connecting with students” amid the volatile postsecondary landscape. As of late August 2020, slightly less than half of the country’s colleges and universities intended to keep at least some instruction remote over the fall semester, while a quarter were still deliberating. Many students, especially low-income or first-generation are often less prepared and don’t always do well in online-only programs.

“Because [Latino] students are so sensitive to financial volatilities,” said Roxanne Garza, UnidosUS’s Education Policy Advisor, the pandemic “could have a big impact on how and when students decide to enroll or re-enroll.”

Still, Garza and Martinez point to a major counterweight — one that continues to motivate UnidosUS’s education advocacy work: The country’s Latino population, more than any other racial group, places immense value in higher education: In a 2016 Pew survey, 86 percent of Latino parents said it’s extremely important that their children secure a degree, compared with 79 percent and 67 percent of their Black and white counterparts, respectively. “Despite all these financial disruptions, shocks, and constant barriers,” Martinez said, Latinos are “still really encouraged” to get their degrees.