LGBTQ Community Faces Greater Challenges with Student Loans and Paying for College

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Kristen Kuchar

By Kristen Kuchar

April 7, 2020

LGBTQ students often face additional obstacles when it comes to paying for college and dealing with student loan debt. For high school students that aren’t accepted by their family, this could mean more than just no financial help. The FAFSA requires information from your parents, and if you can’t get that, it could mean no access to federal aid, such as grants, scholarships, work-study and federal student loans.

And the less financial support you have during college means the greater your student loan debt is upon graduation. At least 60% of LGBTQ student loan borrowers regret taking out student loans, 28% feel that they can’t manage their student loan payments and more than 53% reported earning less than $50,000 per year, according to a shocking survey from Student Loan Hero.

We turned to David and John, husbands and authors of the blog Debt Free Guys, to weigh in on this issue and share their expertise.

What are specific challenges for the LGBTQ community when it comes to paying for college?

Challenges that affect LGBTQ students ability to pay for college and student loans include unaccepting parents holding the need for either their money or their co-signature for a student loan over their kid’s head, forcing them to either not act on their homosexual desires or to seek counseling or conversion therapy to “cure them” of being gay.

Another challenge is that 40% of homeless youth identify as LGBTQ, and many of them are unable to apply for college or student loans. When LGBTQ students can get financing, they often rely on credit cards to pay for the differences in their expenses as opposed to relying on parents.

What are the challenges for managing that debt after college?

The LGBTQ students who have acrimonious relationships with their parents or who have unaccepting parents, often can’t move back home to reduce expenses while paying off debt. 

As both of Prudential’s 2012 and 2016-2017 LGBT Financial Experience Surveys and Experian’s LGBTQ Money Survey suggested, LGBTQ people struggle with a sexual orientation and gender identity pay gap. With that ceiling, it’s harder for us to find the liquidity to pay off student debt as fast as our straight, male peers.

What are the challenges the LGBTQ community faces when it comes to money and finances in general?

Most notably, LGBTQ people can still legally be denied housing, employment and services based on our LGBTQ-status in up to 30 states in the US. The Trump Administration and several states have pushed Religious Freedom laws, which effectively make it harder and more expensive for LGBTQ families to adopt. LGBTQ people have a sexual orientation and gender identity pay gap, and very few LGBTQ people sit in C- and E-suite positions.

Transgender folks and those with HIV/AIDS have exponentially higher healthcare costs.

Far too many LGBTQ people move to more expensive, LGBTQ-friendly cities, such as San Francisco, New York and Chicago, where more of our income is eaten by cost of living.  

Finally, financial services as a whole has effectively left LGBTQ people out of its marketing and collateral. So, many LGBTQ people don’t think financial security and independence are for them. Most LGBTQ people don’t trust traditional financial services because we assume the person sitting across the desk either doesn’t know how to or doesn’t want to help people like us, according to Prudential’s LGBT Financial Experience Surveys.

What advice can you give to the LGBTQ community in regards to paying for college?

Consider trade schools and apprenticeships. The ROI on a college degree is at an all-time low and the country is in desperate need for trades people. If you must pursue college, be crystal clear on whether your student loan expenses and debt will be commensurate with your future career and income; assuming six-figures in student loan debt for a liberal arts degree makes no sense.

Finally, become a regular with applying for scholarships and grants, including LGBTQ-specific scholarships and grants and low-dollar scholarships and grants.

What advice can you give to the LGBTQ community that are dealing with student loan debt?

Create a payment plan and be militant about sending a payment every single month, regardless of what anyone says or how the terms of your student loan changes. Look for companies that specialize on reducing the interest rates on student loan debt, and apply for refinancing accordingly.

[Keep in mind refinancing federal loans means a loss in many benefits – income-driven repayment options, any federal forgiveness programs, options to defer your loan, a death and disability discharge, and more.]

When applying for jobs, apply to those that offer student loan repayment assistance (more companies are doing this) or negotiate it into your contract.

Finally, live below your means, avoid assuming more debt, increase your income streams with a part-time job, side hustle or starting your own business, and send all your extra money to your student loans after you’ve built an emergency savings account. When you send more money than the minimum due, be sure it’s applied to principal.

Tips for LGBTQ that are Headed to College

Fill out the FAFSA for federal aid. If your parents refuse to file the FAFSA, ask the college financial aid administrator for a dependency override, so you can file the FAFSA on your own. Otherwise, the most you can get are student loans until you reach age 24. 

Apply to as many scholarships as you can. The Point Foundation provides many scholarships for LGBTQ students. Sallie Mae also offers a free scholarship search for both undergraduate and graduate school.  

Consider community college for two years and then transfer to a four-year school.

Choose an affordable college.

Choose a college with free tuition. There are many colleges that don’t charge tuition in exchange for work.

Work while you’re in college. 

Tips for LGBTQ Dealing with Student Loan Debt

Research if you could qualify to have your federal student loans forgiven. Public Service Loan Forgiveness allows those working in public service jobs, including law enforcement, public education, public health and military service. There are other programs for federal student loan forgiveness for the following professions: Doctors and Healthcare Providers, Lawyers, Military, Nurses, Teachers, Veterinarians and Volunteering cing private student loans for a lower interest rate.

Refinancing student loans may lower your interest rate, which could save you money. Since you’re able to put more money towards the principal balance, you could eliminate student loans faster. Keep in mind there are pros and cons to refinancing student loans.

Refinancing federal student loans means a loss in all federal benefits, including the temporary payment pause due to coronavirus. Other lost benefits include any potential federal loan forgiveness, the option for payments based on income and generous payment pause options in times of economic hardship and unemployment.

Credible is a great tool for comparing rates from multiple lenders at once. 


Find an employer who will help you pay your student loans. Many employers are offering to give employees student loan repayment assistance as a job perk. SoFi, Staples and Fidelity Investments are just a few of the companies that offer this perk

Make a big move (or small moves) to pay down your student loan debt. There are big moves you can make to help pay student loansmove to an area that will help repay your loans, downsize your home (a tiny home, perhaps?), move to an area with a cheaper cost of living, find a better paying job or start a side hustle.

Small moves add up, too. There are many ways you can earn more money or save money to pay off student loans faster.


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