Luis Fernandez, who will graduate in May from Cal State Fullerton, put himself through college and has a stack of receipts to prove it. He paid for his education, all $12,800 of it, in cash.
"My parents have always said, 'If you don't have the money to pay for it, then work for it,' " Fernandez said.
So he did. Fernandez, 24, who came from Mexico with his parents when he was 8, worked at a Westminster drugstore and wrote personal checks to cover his college fees. He decided not to take out student loans.
Although the pay-as-you-go method worked for Fernandez, one of his teachers, Chicano studies professor Alexandro Gradilla, has seen many Latinos drop out or take extra years to graduate because they won't finance their education the way most college students do: with a combination of work, grants and loans.
"I see this happen all the time in my classroom, students who are overworked and under-prepared for class," said Gradilla. "When I ask them about taking out loans instead of working so much, their thinking is, 'If you can't pay it in cash, then it's not a good idea.' "
Educators and financial aid experts said the cultural aversion to loans -- considered a sign of a strong work ethic -- is common among Latino immigrants and their children. And it creates an odd dilemma in academia.
Financial aid experts worry that students who rely heavily on loans are taking on too much personal debt to pay for college, but educators are trying to convince Latinos that school loans, if used wisely, can lead to high-paying jobs later.
Another of Gradilla's students, ethnic studies major Juan Coronel, said he noticed the trend while working part time as a teller at Banco Popular in Montebello.
"The majority of Mexican clients we had, I noticed, liked to pay in cash," said Coronel, 22. "They were insecure about credit or borrowing, as they thought fraud would be a possibility. I think we learned that from our parents."
Coronel hasn't taken out any loans either.
Students, professors, researchers and loan providers cited three common reasons for the aversion to loans: lack of knowledge about financial aid, fear of debt and distrust of lenders.
For immigrants, that distrust is rooted in bad experiences with government-backed financial institutions in their home countries. Also, some students and parents might be reluctant to seek aid because they are undocumented immigrants.
