Financial Literacy for Hispanic and Latino/a Students

Are you a Hispanic or Latino/a college student looking to build financial literacy? Learn about personal financial literacy in this comprehensive guide.

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by Staff Writers

Updated August 30, 2022

Reviewed by Mary Louis, and Susana Muñoz, Ph.D.

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Financial Literacy for Hispanic and Latino/a Students
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What Is Financial Literacy?

Due to a history of being underserved in the U.S., Hispanic and Latino/a families may have less exposure or access to financial literacy education than white families. As a result, students who grew up in under-resourced environments may begin college without a firm understanding of what financial literacy means.

Simply put, this term encompasses skills related to using financial resources and understanding how to earn, budget, save, and invest money wisely. Enhancing one's financial literacy can help students make smart decisions about their money.

They can do this by understanding how student loans and interest rates work, creating a budget and sticking to it, and starting to save money early.

Keep reading to learn about factors in financial planning and where to find financial literacy resources tailored to Hispanic and Latino/a students.

Why Financial Literacy Is Important for Hispanic and Latino/a Students

  • Hispanic test-takers scored lower on TIAA Institute's 2021 financial literacy exam than white individuals: Hispanic test-takers scored an average of 41% on this financial literacy exam, compared to 55% for white examinees. Due to inequities in educational funding and resources, Hispanic individuals may have less access to financial literacy training in primary or secondary school.
  • U.S.-born Hispanic individuals ages 18-34 earned higher financial literacy scores than their peers born outside the country: Obtaining access to financial literacy coursework may be especially important for Hispanic students born outside the U.S. Many of these learners may not have been exposed to a U.S.-based financial literacy model while growing up.
  • As of 2016, more than 70% of Latino/a students took out loans to attend college: Seventy-two percent of Latino/a students take on student loan debt to get through college, compared to 66% of white students. Understanding how to responsibly address their debt while saving for the future is critical for building generational wealth and greater financial literacy within these communities.
  • Thirty-three percent of Hispanic borrowers put off marriage due to student loan debt and 37% delayed having children, compared to 19% and 27% of white borrowers: Hispanic and Latino/a students who master personal financial management may have an easier time paying down college loan debt and pursuing major life milestones. Financial literacy can provide the tools needed to budget, save, and achieve financial freedom.
  • Hispanic families have roughly one-fifth the wealth of white families: As of 2019, the median wealth for white families in the U.S. was $184,000 and $38,000 for Hispanic families. Because many Hispanic learners come from families with significantly less wealth than their white peers, they are more likely to take out student loans. Financial literacy can provide the tools needed to understand loan repayment plans while still building wealth.

Why is financial literacy important for Hispanic and Latino/a students to understand?

Our money mindset is our relationship, thoughts, habits, and behaviors around money. Many of these things are taught to us both directly and indirectly from our parents. When we think about making, spending, and saving money, if our families haven't been exposed to ways to grow wealth or optimize tax strategies we risk repeating the same type of financial cycles. The more knowledge we as a community have, the more empowered we'll feel.

— Walli Miller

4 Factors to Consider for Financial Planning

Student Loans

Student loans can help bridge the gap between what Hispanic and Latino/a students and their families have saved for school and how much college costs. That said, understanding interest rates and options for paying for college without student loans can help students minimize how much debt they take on to earn a degree.

Scholarships and Grants

Many Hispanic and Latino/a scholarships are available to help offset educational costs. Using scholarships and grants is a popular option for all students since these types of funding don't need to be repaid. This is true as long as students meet the terms of their award, such as maintaining a specific GPA.

Credit Cards

Credit cards are a popular option for students. However, they do come with some risks. High interest rates can lead to increased debt quickly for learners who cannot afford to pay off their balance each month. Before going down this path, students should ask themselves whether they are ready for a credit card and its responsibilities.

Saving and Budgeting

Learning how to budget while in college can help set students up for success — in school and long beyond their college days. Hispanic and Latino/a students can choose from various free and paid apps that can help them save money in college. They can also learn how to invest those savings.

What aspect of financial wellness impacts Hispanic and Latino/a students the most?

Since many of us are first-generation Americans and first-generation college graduates, there isn't institutional knowledge that gets passed down to us. Learning how to navigate financial aid and student loans — let alone credit cards and building a good credit history — may not be things the previous generation was familiar with.

— Walli Miller

The learning doesn't need to stop here

Explore the rest of our collection of financial education resources to continue your journey to a healthy financial future.

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Financial Literacy Resources for Hispanic and Latino/a Students

Meet the Professional

Portrait of Walli Miller

Walli Miller

Walli Miller is a Latina, first-gen college graduate and daughter of an immigrant. She's the founder of Financially Thriving Money Coaching and helps millennial women go from feeling overwhelmed financially to financially confident. She focuses on helping ambitious women create a plan to pursue a work-optional lifestyle.