LGBTQ Student Loan Borrowers Face Rough Road: Survey

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Having to work multiple jobs and scraping by paycheck to paycheck, with the lingering worry that you’ll probably never be able to buy a house.

Many in the LGBTQ community are so concerned with such fallout from their student loans that they regret borrowing at all. In fact, 54% of those surveyed said they wish they’d avoided education debt, only a slight decrease from the 60% figure cited in our 2018 survey of LGBTQ borrowers.

Student loans weighed heavily on respondents from all income levels, particularly because of the specific problems LGBTQ students endure, such as discrimination in their own home and when seeking outside help with their finances.

Unfortunately, LGBTQ community members also reported feeling behind on other financial goals, including retirement planning, due in no small part to their student loan, credit card and other debt.

Key findings

  • About 3 in 10 LGBTQ borrowers say their student loan debt is unmanageable. Slightly less — 23% — feel their debt is “very manageable,” while most (48%) said their debt is “somewhat manageable.”
  • Despite their regrets about borrowing, 62% are glad they went to college. Most (58%) reported feeling accepted by their college peers — although more than 1 in 10 did not feel accepted.
  • Roughly 4 in 10 LGBTQ borrowers said they’ve been denied financial help due to their sexual orientation. About 14% of them said they’d experienced this discrimination on multiple occasions.
  • Student loans have also stopped 87% of respondents from reaching key financial milestones. Specific goals missed due to student debt include homebuying (41%), moving out (27%), buying a first car (23%), starting a family (19%) and getting married (18%).
  • Nearly 6 in 10 LGBTQ borrowers also have other types of debt. Credit card debt (63%) is by far the most common, but other sources include auto loans (38%), personal loans (20%) and mortgages (16%).
  • The majority of borrowers in the LGBTQ community (65%) are familiar with student loan refinancing, but only 38% have refinanced their debt. Those who have refinanced said they mainly did so to lower monthly payments or lower their interest rate. Ultimately, 63% of those who refinanced said refinancing helped them move closer to their financial goals.

Many LGBTQ borrowers have more student loan debt than they can handle

The LGBTQ community includes many student loan borrowers with regrets — again, 54% polled say they wish they could have a redo.

“I regret taking out my student loans because my degree didn’t help me get a well-enough-paying job to cover the cost of living, plus my student loan debt,” said one respondent. “Now I am stuck working two jobs just to stay above water, which is very frustrating.”

Although the reasons for regret vary, having taken on too much debt is a common theme. Nearly 29% of LGBTQ borrowers feel their debt isn’t manageable, though a plurality of respondents (48%) describe their debt as “somewhat manageable.”

Finding a well-salaried job isn’t necessarily a problem unique to LGBTQ borrowers — among all college seniors with loans to repay, about 7 in 10 expressed doubt they’d be able to make ends meet, according to a recent Student Loan Hero survey.

Still, LGBTQ professionals undoubtedly face more obstacles in the workplace than the average college graduate. In fact, 1 in 4 LGBTQ workers report facing discrimination at their job within the last five years, according to nonprofit Out & Equal Workplace Advocates’ 2019 report.

But despite some regrets, 62% of borrowers in the LGBTQ community say they’re glad they attended college. For some, it’s one of the places in society where they felt most accepted — about 58% reported feeling welcomed by peers on campus.

Some LGBTQ borrowers get turned away by financial professionals

Unfortunately, many LGBTQ members in debt have found a less-welcoming atmosphere away from their college campus. About 40% of the borrowers we surveyed said their sexual orientation caused others to decline to offer financial help. And 14% report multiple instances of this type of discrimination.

In fact, the number of LGBTQ individuals denied financial assistance due to their sexual orientation increased from our 2018 survey, from 32% to 40%.

“Reaching out for financial help is hard enough. Throw in discrimination and homophobia, and it can be downright miserable,” said David Rae, the founder of a Los Angeles-based wealth management firm. “Look for resources specifically tailored for the LGBT community. I’m not alone as an out and proud financial planner.”

Chicago-based financial planner Brian Thompson, whose clients include LGBTQ couples, agrees that more financial-service providers are reaching out to the community. “My advice is to look for non-traditional places. We’re out there and eager to help.”

And there are some encouraging signs out there, including the growing number of scholarships reserved for LGBTQ undergrads.

And some also lack key support from family

Aside from facing the possibility of discrimination in public settings, 60% of our survey respondents also reported feeling at least partially unwelcome within their own families. In addition, about 28% reported that they have been kicked out of the home because of their sexuality.

A lack of family support could harm LGBTQ individuals right out of the gate. Without parental support, students could end up taking out more loans. Parents can also play a broad role in securing financial aid, such as by providing their information on the Free Application for Federal Student Aid (FAFSA).

Without mom, dad or more family in their corner, LGBTQ borrowers’ repayment could also be harmed. Those who report not feeling at least somewhat accepted by their families are more likely to say their debt is unmanageable (38%) than those who feel accepted at home (26%). They’re also more likely to report not being on the right track for retirement (62% versus 45%).

“Knowing that people will have your back, or possibly provide financial support if things get hairy, helps keep us in a healthy mental state,” said John Schneider, a co-host of the Queer Money podcast. “In addition, those that have familial support are more likely to also have financial support when they leave the home, compared to those that are leaving because their home is not a welcoming place.”

And there may be other less-obvious, and potentially dangerous, consequences. LGBTQ student borrowers who don’t feel supported by their families are twice as likely to report that their debt has kept them from leaving a bad relationship. Overall, 15% said their student loans had kept them from walking away from an ill-fitting partner.

With overwhelming debt comes unachieved financial goals

With a heavy student loan debt burden in some cases and a lack of a support system in others, it’s no surprise that 87% of LGBTQ borrowers are falling behind on their other financial goals.

Most notably, 41% of respondents say their debt had stopped them from being able to buy a home. Other financial goals left unmet include:

  • Pursuing passions (35%)
  • Traveling (26%)
  • Moving out (27%)
  • Buying a first car (23%)
  • Starting a family (19%)
  • Getting married (18%)

At the same time, student loans aren’t the only money-related problem for many of the LGBTQ individuals we surveyed. About 57% report being burdened by other types of debt. Credit card debt is far and away the biggest bugaboo of those respondents, at 63%, although that figure was down significantly from 79% in our 2018 survey results.

“This is the first bit of good credit-card-debt news we’ve seen in a while,” said Schneider, also a founder of Debt Free Guys, adding that perhaps a somewhat stronger economy may have helped matters.

In 2019, auto loans (38%), personal loans (20%), mortgages (16%) and shorter-term loans (15%) also accounted for LGBTQ borrowers’ debt.

Student loans and secondary debt have also dimmed many LGBTQ borrowers’ hopes in terms of saving for retirement: Nearly half of the people we surveyed (48%) don’t think they’re on the right track, with 56% saying they don’t even have a retirement investment account, such as a 401(k) or IRA.

“I can’t save,” one respondent told us. “I contribute a small amount to a 401(k), but it’s not significant enough for retirement — yet [it’s] all I can barely afford.”

Finding student loan relief via refinancing, other strategies

For LGBTQ borrowers, there’s no single solution to all of their student loan concerns. Some could benefit from pursuing student loan forgiveness or enrolling in income-driven repayment (if they have federal student loans), while others might be better off cutting expenses and throwing extra income at their outstanding balance.

For creditworthy LGBTQ borrowers — or those with creditworthy cosigners — student loan refinancing could offer some relief. It allowed some of the survey’s respondents to either decrease their monthly payment or reduce their interest rate, along with providing the additional perk of consolidating multiple older loans into one new, simpler repayment.

While 65% of the borrowers surveyed say they are familiar with the practice of refinancing, only about 38% report having gone ahead with it. That’s a significant departure from the approximate 66% who said they refinanced in our 2018 LGBTQ survey.

Of those who did refinance in this latest survey, however, 63% say it helped them advance toward achieving other financial goals.

Interested in refinancing student loans?

Here are the top 7 lenders of 2019!
LenderVariable APREligible Degrees 
Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 3.45% APR (with Auto Pay) to 6.99% APR (with Auto Pay). Variable rate loan rates range from 1.81% APR (with Auto Pay) to 6.49% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of November 6, 2019, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 11/06/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at hello@earnest.com, or call 888-601-2801 for more information on our student loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.


2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 3.46% APR (with AutoPay) to 7.61% APR (without AutoPay). Variable rates currently from 2.31% APR (with AutoPay) to 7.61% (without AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.31% APR assumes current 1 month LIBOR rate of 2.31% plus 0.75% margin minus 0.25% for AutoPay. If approved for a loan, the fixed or variable interest rate offered will depend on your credit history and the term of the loan and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

3 Important Disclosures for Laurel Road.

Laurel Road Disclosures

Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

ANNUAL PERCENTAGE RATE (“APR”)
This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

FEE INFORMATION

There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.

LOAN AMOUNT

For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
For eligible Associates degrees in the healthcare field (see Eligibility & Eligible Loans section below), Lender will refinance up to $50,000 in loans for non-ParentPlus refinance loans. Note, parents who are refinancing loans taken out on behalf of a child who has obtained an associates degrees in an eligible healthcare field are not subject to the $50,000 loan maximum, refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for more information about refinancing ParentPlus loans.

ELIGIBILITY & ELIGIBLE LOANS

Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).

Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.

All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for applicable terms and conditions.

For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.

INTEREST RATES

The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.

DISBURSEMENT OPTIONS

The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.

POSTPONING OR REDUCING PAYMENTS

After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.

We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.

We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.

If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.

KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.

This information is current as of November 8, 2019 and is subject to change.


4 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers.


5 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 1.9299999999999997% effective October 10, 2019.


6 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 11/07/2019 student loan refinancing rates range from 1.90% to 8.65% Variable APR with AutoPay and 3.49% to 7.75% Fixed APR with AutoPay.

 


7 Important Disclosures for College Ave.

College Ave Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

1College Ave Refi Education loans are not currently available to residents of Maine.

2All rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.

4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 09/23/2019. Variable interest rates may increase after consummation.

1.81% – 6.49%1Undergrad
& Graduate

Visit Earnest

2.31% – 7.36%2Undergrad
& Graduate

Visit SoFi

1.99% – 6.65%3Undergrad
& Graduate

Visit Laurel Road

2.43% – 7.60%4Undergrad
& Graduate

Visit Splash

2.02% – 6.30%5Undergrad
& Graduate

Visit CommonBond

1.90% – 8.65%6Undergrad
& Graduate

Visit Lendkey

2.74% – 6.24%7Undergrad
& Graduate

Visit College Ave

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Published in Student Loan Repayment, Student Loans

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