The Alienating, Frustrating Debt Burden of LGBTQ+ Youth

“Alienating,” says Susan. She’s been asked to summarize her experience living with student loan debt as a young, queer woman. She hesitates, and then adds, “And frustrating.”

Life with student loan debt is especially alienating for Susan because she’s an American expatriate living abroad. She moved to Berlin in part because the cost of living there is still relatively low; life in the United States had become prohibitively expensive, especially since she spends hundreds of dollars each month paying down her student loan debt. In Berlin she feels isolated by the fact that she — the lone American in her circle of friends — is the only one saddled with student loan debt.

This fact also leads to frustration. If she were living in the United States, she says, she probably wouldn’t have considered the burden of student loans as strange; everyone in her social circles back home had debt. But living in Europe throws her predicament into sharp relief — she’s surrounded by peers that have thousands of dollars more in their annual budget due to the fact that they’re debt free.

Back home, Susan would be one statistic among many, especially given the fact that young LGBTQ+ borrowers receive significantly less family support than their non-LGBTQ counterparts. According to a new study by Summer and Student Debt Crisis, only 25% of LGBTQ+ borrowers 20-24 years old receive any family assistance toward their student loan payments, with the percentage decreasing further to 20% for LGBTQ+ borrowers of color. By way of comparison, non-LGBTQ borrowers are more than two times as likely to receive family support, with 53% receiving help with their loan payments.

The consequences of this differential are real: defaulting on student loans is more common among LGBTQ+ youth, with default rates hovering at 19% among LGBTQ+ borrowers age 25-29, compared to 12% of non-LGBTQ borrowers the same age. Put another way, nearly one in five LGBTQ+ borrowers have defaulted, compared to approximately one in ten non-LGBTQ borrowers. This relates to previous findings that LGBTQ+ borrowers owe, on average, $16,000 more than their straight peers. “As long as I don’t default, I consider that a win,” says Susan, who juggles multiple jobs to keep up with her payments.

For LGBTQ+ borrowers like Susan, student debt can be intimately linked to their home living situation, with many borrowers using college and student loans to move out of unaccepting homes. “The borrowed money was a lifeline,” Susan says. “I was able to get space from my family and become the person I am.” Unfortunately, borrowers in these circumstances may not have parents willing to pay for their education, exacerbated by the fact that LGBTQ+ students must seek emancipation or risk having their parents not provide income information required to qualify for federal student aid.

In sum, student loan stressors are hitting LGBTQ+ borrowers especially hard, exacerbated by monthly salaries often not commensurate with looming student loan bills. 87% of LGBTQ+ borrowers surveyed report difficulty making next month’s student loan payment. “This report highlights the disturbing fact that student debt disproportionately impacts LGBTQ+ youth,” says Natalia Abrams, Executive Director of Student Debt Crisis. “Gender identity and sexuality are strongly linked to a lack of critical economic an emotional support from family, a critical lifeline for marginalized groups.”

One silver lining from a statistical perspective is that the disparities between LGBTQ+ borrowers and non-LGBTQ borrowers do diminish over time, suggesting heartening developments in terms of equality both in and out of the workplace. But in the meantime, younger LGBTQ+ borrowers face difficult financial prospects, with over half of them regretting taking on their student loans.

Susan is one of those with regrets. She has been vocal about her experiences, urging high schoolers to consider alternatives to accruing too much debt, such as balancing part-time work with studying, or choosing state universities over private ones. “It’s hard watching students, especially younger queer students, facing the same debt I experience. It’s hard not to take out loans, but the reality of paying back tens of thousands of dollars might be even harder.”

Click here for access to the full report.