TREND TRUTH
Student Loans have Reached New Heights
According to a recent Wall Street Journal article, “Students Borrow More Than Ever for College,” student borrowing for college has reached a record high. Just last year, the amount of borrowing for educational loans grew nearly 25% where such borrowing had once been as low as 1.7%. As students across the nation headed back to school, FGI Research conducted a study to learn more about respondents who had borrowed money to pursue higher education.
Where Aid Comes From
Of those who responded, 83.92% said they had qualified and used Financial Aid. Respondents were asked to share all forms of financial aid that they received for their education. The majority of this aid came from Stafford Loans (76.98%), followed by Perkins Loans (36.51%) and then private loans (29.37%). While most respondents were female, the gender distribution of those seeking financial aid were mostly equal. Moreover, respondents receiving financial aid were diverse ethnically and in terms of age, making it apparent that this trend has affected multiple demographics since the country’s economic downturn.
Consumers Turn to Social Media
The subject of student loans has also hit social media outlets. Facebook has seen a rash of groups, notes, and blogs to discuss the issue of financial aid. 34% of students got their information from the popular social-networking site. Respondents also cited YouTube as a source for information about student loans. 23% of those surveyed said they had used YouTube to inform their decisions about financial aid. And it’s not just students using social media to discuss the issues surrounding Financial Aid. In June 2009, Congresswoman Nancy Pelosi posted a note on Facebook with information to make students aware of the many benefits available to help them manage their student loans. Again, we see the rising role of social media not just in campaigns but in the daily act of governing.
The Loans Linger
Approximately half of our respondents are still paying off student loans. Not surprisingly, 82% of them reported that the debt affects their standard of living. 65% reported changes in their spending habits with regards to leisure activities, food and household purchases; 40% said loans have prevented travel; and 32% said they have postponed major milestones such as marriage, starting a family, or purchasing a house. If the economic downturn persists, the question remains as to how to reap the benefits of higher education without incurring the risk of overwhelming debt from student loans.
Actionable Insights
Given that students said they had changed their purchasing habits to cope with debt, studies like these have very real implications for many industries. Young adults are a demographic with considerable sway in the market. If many of them are cutting back on discretionary spending to cope with student loans, it helps to know what will attract their business. The way to find out is through advanced research methods. Social media monitoring is especially pertinent in this case, since so many young people are using tools like Facebook, YouTube, MySpace, and now Twitter. Yet online survey data can always lend deeper insight into consumer trends. Robust research can help any business cope with this and other symptoms of economic downturn.
Next Steps You Can Take
Survey Methods
Date of Study: 9/22/2009
Total Responders: 143
Sample Source: FGI SmartPanel
September 24th, 2009 at 2:36 pm
I find this information to be largely accurate and reasonable. I accepted quite a great deal of student loans and my parents bear an even largely burden than I. As a recent grad, I have begun to make payments on my student loans. $250 a month does get in the way of other expenses I have at this age. It is the amount of a car payment. I have a car that thankfully does not require payments, but it does require repairs and when these repairs come up, my student loans do cause a strain. It was a necessity for myself and my family to take out loans to pay for my education, but I do believe it was worth it. Unfortunately, my school did not offer a lot of financial aid and is notorious for being restricted on their aid. I accepted what I could, now I owe what I do, and this is not due to the economic downturn.
October 4th, 2009 at 2:10 am
Indeed, this issue is already very serious, accept student loans to attend school students after graduation, if not in time to find a job, area wages, repayment of loans, put them at great trouble, and because of the financial crisis, work and not easy to find, give the community and students brought more trouble