US Student Loans, Consumer Attitudes
A sizable percentage of consumers feel overwhelmed by student loans, as the percentage of students who thought about dropping out of school in order to prevent incurring additional student loans was 39%. Confusion/lack of understanding are common feelings consumers have about taking on loan debt, as 9% of consumers who have students loans said they're "not at all confident" in terms of understanding student loans. Among students between the ages of 20 and 26, the majority of them expect that their loans won't be repaid until the age of 35 at a minimum.
1. how consumers think/feel about student loans
- A common feeling consumers have about student loans is feeling overwhelmed. As a financial professional with AIG stated: ""[I]n many cases the debt burden feels overwhelming in the amount of money owed relative to what people are earning. In some cases, people are unemployed, or underemployed, just makes it feel like it's an intractable problem."
- Data supports the prevalence of that overwhelmed feeling, as the percentage of students who thought about dropping out of school in order to prevent incurring additional student loans was 39%.
- A common feeling consumers have about refinancing student loans is feeling afraid. According to survey results, 85% of respondents said they haven't refinanced their loans because they feel afraid about doing so.
- Confusion/lack of understanding is another thought/feeling consumers have about student loans. Survey results show that 26% of consumer borrowers didn't know how they'd manage their student loan debt.
2. How consumers think/feel about taking on loan debt & likes/dislikes about student loans
- Confusion/lack of understanding are common feelings consumers have about taking on loan debt. Survey results found that among consumers who have students loans, nine percent said they're "not at all confident" in terms of understanding student loans and 53% responded that they're just "somewhat confident" about the same.
- The aforementioned data points stand in stark contrast to the 27% of consumers who said they're "confident" about understanding student loans and the 19% who said they're "very confident" about the same.
- A noteworthy dislike among consumers about student loans is the delay it can cause in terms of achieving life goals, such as buying a house.
- The delay of retirement savings is another example, as the percentage of students who think they'll need to delay such as a result of their student loans is 31%.
- One thing that consumers like about student loans is the potential for higher earnings that can result from obtaining their college degree, which their student loans help make possible in part.
- Approximately 50% of consumers thought their degree would yield $20,000 in additional, annual earnings.
- Additionally, 34% of consumers thought their degree would yield $30,000 in additional, annual earnings.
3. consumers' expectations of student loans
- Among the college-student millennials surveyed, 26% expected that they would be moving home after they graduate from college for the reason of being able to better financially-manage their student loan payments.
- Among students between the ages of 20 and 26, the majority of them expect that their loans won't be repaid until the age of 35 at a minimum.
- Approximately 10% of consumer borrowers incorrectly believe that they "don’t need to repay your loans if . . . [they] can’t find a job after college."
- Over half (52%) of consumer borrowers incorrectly believe that interest for unsubsidized loans doesn't accrue while enrolled as a student.
- Nearly half (47%) of consumer borrowers incorrectly believe that using forbearance for federal student loans prevents interest from accruing during that forbearance period.
- Over one-third (38%) of consumer borrowers are not aware that federal loans have fixed interest rates.
- Over half (53%) of consumer borrowers incorrectly believe that their repayment amount for student loans is automatically determined by their income.
- Thirty-nine percent of consumer borrowers planned to "use an income-based [repayment] plan to manage their loans" while one-fourth of consumer borrowers plan to "use a standard repayment plan."
YOUR RESEARCH TEAM APPLIED THE FOLLOWING STRATEGY:
We mainly used survey data and statistics to determine consumer attitudes and perceptions towards student loans in the U.S. because that would quantify the prevalence of such attitudes and perceptions in a way that mere statements from individuals about what they perceive those attitudes and perceptions to be. To that end, this approach provided us with data directly from the student loan consumers, which we determined was the best research route in this instance. We found the information included above from articles published by news and financial industry sources, all of which included survey data about the consumer attitudes and perceptions that we were looking for information about. Some of the sources we used were USA Today and Student Loan Hero. Together, this research process provided us with all the information we sought about consumer attitudes and perceptions towards student loans in the U.S.