More Than Half of Student Loan Borrowers See the ROI
By Christian Widhalm, SVP of Lender Partnerships, LendKey
Student loan debt continues to trend upward and remains prominent in the news. LendKey has performed research to assess how borrowers felt about their college choices when considering their ability to repay their student loan debt. The company found that 53.9% were very pleased with the ROI their college or university provided them. Given the rising cost of tuition, students and their families are definitely still seeing the value of borrowing to fill the gaps among scholarships, grants, and their personal funding when they’re financing higher education.
More than half of borrowers were very satisfied with their college or university choice given their ability to pay back their loans. The borrower’s satisfaction with their college or university choice increases with age substantially, which aligns with career advancement, paid off student debt, purchased homes, and established families. However, there is an opportunity to educate these young borrowers on their borrowing and repayment options.
Three-quarters of respondents to the study said getting student loans funded was “easy” to “very easy,” but many were unclear on the payment and terms. A little less than half of all respondents said that at the time they signed their student loan paperwork, they were not aware of what their monthly payment would be after graduation. Student loans often take a decade or more to pay off; with that kind of time and money investment, more education is needed around the subject.
These significant debts have long-term ramifications for borrowers, and ultimately credit unions, delaying additional purchases, such as cars and homes. Helping to educate these borrowers early on in their financial journey can help your credit union cultivate a loyal member for life.