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Educational Lending - US - March 2014

“The student loan crisis continues, driven by the escalating cost of college as well as slow recovery, which is hindering graduates’ abilities to repay their loans. The government is beginning to take the problem seriously, and proposals to help solve the problem are being considered both to help students repay their loans and to make lenders more accountable for the loans they make.”

– Robyn Kaiserman, Financial Services Analyst

Some questions answered in this report include:

  • How serious is the student debt crisis anyway?
  • What can be done to lower the default rate?
  • What is the long-term impact of so much student debt?

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Data sources
        • Consumer survey data
          • Direct marketing creative
            • Abbreviations and terms
              • Abbreviations
                • Terms
                  • Generations
                  • Executive Summary

                      • The market
                        • Figure 1: Total amount of US student loan debt, Q1 2009-Q4 2013
                        • Figure 2: Percentage of federal vs. private loans disbursed, 2006/07-2012/13
                      • Market drivers
                        • Figure 3: Published tuition and fees for various types of institutions in current dollars, 2003/04-2013/14
                        • Figure 4: Total federal grants and loans, 2007/08-2012/13
                      • Leading companies
                        • The consumer
                          • Figure 5: Amount of outstanding educational loans, by gender, January 2014
                          • Figure 6: Minimum monthly loan payments, by gender, January 2014
                          • Figure 7: Belief in value of college education, by age, January 2014
                          • Figure 8: Attitudes toward educational/student loans, by gender, January 2014
                          • Figure 9: Knowledge of, and attitudes toward, repayment, by gender, January 2014
                          • Figure 10: Most important features of a student loan, by gender, January 2014
                        • What we think
                        • Issues and Insights

                            • How serious is the student debt crisis, anyway?
                              • Issues
                                • Implications
                                  • What can be done to lower the default rate?
                                    • Issues
                                      • Implications
                                        • What is the long-term impact of so much student debt?
                                          • Issues
                                            • Implications
                                            • Trend Application

                                                • Inspire trend: No Degree, No Problem
                                                  • Inspire trend: The Nouveau Poor
                                                    • Mintel futures: Brand Intervention
                                                    • Market Size

                                                      • Key points
                                                        • Rising student debt
                                                          • Figure 11: Consumer debt, by type, total amount and percentage of all consumer debt, Q1 2009, Q4 2013
                                                          • Figure 12: Amount of student debt, Q1 2009-Q4 2013
                                                        • How people are paying for college
                                                          • Figure 13: Sources of college funds, average percent of total cost paid, 2010-13
                                                      • Market Drivers

                                                        • Key points
                                                          • The cost of college is still increasing, but more slowly
                                                            • Figure 14: Tuition and fees for educational institutions, by type, in current dollars, 2003/04-2013/14
                                                            • Figure 15: Percent change in published tuition and fees, by type of institution, 2003/04-2013/14
                                                            • Figure 16: Change in published graduate tuition and fees, by type of institution, 2102-13, 2013-14
                                                            • Figure 17: Published and net undergraduate tuition, fees, room and board, 2010/11-2013/14
                                                          • The cost of not going to college is escalating
                                                            • Figure 18: Discrepancy in earnings between high school and college graduates, by generation, 2013
                                                          • Help from the government is slowing
                                                            • Figure 19: Total federal grants and loans, 2007/08-2012/13
                                                          • The trend in college enrollment may be changing
                                                            • Figure 20: Undergraduate and graduate school enrollment, October 2000-October 2012
                                                            • Figure 21: Percent of high school graduates enrolled in college, 2000-12
                                                            • Figure 22: Believe taking out a student loan is a good investment, December 2011, January 2014
                                                          • Decline of college-age students
                                                            • Figure 23: Projected population by age group, 2015, 2020, and 2030
                                                          • Legislative changes
                                                            • Lower interest rates for federal loans
                                                              • Protect Student Borrowers Act of 2013
                                                                • CFPB extends its oversight
                                                                  • Fairness for Struggling Students Act 2013
                                                                  • Competitive Context

                                                                    • Key points
                                                                      • Federal vs private lending market
                                                                          • Figure 24: Percentage of federal vs. private loans disbursed, 2006/07-2012/13
                                                                        • Credit unions stepping in
                                                                        • Innovations and Innovators

                                                                          • Key points
                                                                            • SoFi
                                                                              • Sallie Mae uses Facebook to run contest
                                                                                • Wells Fargo film initiative encourages college attendance
                                                                                  • Discover offers new scholarships
                                                                                  • Marketing Strategies

                                                                                    • Key points
                                                                                      • Brand analysis: Sallie Mae
                                                                                        • Direct mail
                                                                                          • Figure 25: Sallie Mae automatic debit direct mail, 2014
                                                                                        • Email
                                                                                          • Figure 26: Sallie Mae loan disbursement email, 2014
                                                                                          • Figure 27: Sallie Mae Smart Option student loan email, 2014
                                                                                        • YouTube
                                                                                          • Figure 28: Sallie Mae Banking on the Future Sweepstakes video promotion, 2014
                                                                                          • Figure 29: Sallie Mae “I Make a Difference” video, 2014
                                                                                        • Brand analysis: Wells Fargo
                                                                                          • Direct mail
                                                                                            • Figure 30: Wells Fargo loan consolidation direct mail ad, 2014
                                                                                          • Email
                                                                                            • Figure 31: Wells Fargo student loan acquisition email, 2013
                                                                                          • Online ads
                                                                                            • Figure 32: Wells Fargo double interest rate discount online ad, 2013
                                                                                          • YouTube
                                                                                            • Figure 33: Wells Fargo financial aid video, 2013
                                                                                            • Figure 34: Wells Fargo managing money video, 2012
                                                                                          • Brand analysis: Discover
                                                                                            • Direct mail
                                                                                              • Figure 35: Discover loan acquisition direct mail, 2014
                                                                                              • Figure 36: Discover student loan acquisition direct mail, 2013
                                                                                            • Email
                                                                                              • Figure 37: Discover loan acquisition email to AAA members, 2014
                                                                                          • Social Media – Educational Lending

                                                                                            • Key points
                                                                                              • Market overview
                                                                                                • Key social media metrics
                                                                                                  • Figure 38: Key performance indicators, February 24, 2013-February 23, 2014
                                                                                                • Brand usage and awareness
                                                                                                  • Figure 39: Brand usage and awareness of educational lending brands, January 2014
                                                                                                • Interaction with brands
                                                                                                  • Figure 40: Interaction with educational lending brands, January 2014
                                                                                                • Online conversations
                                                                                                  • Figure 41: Online mentions, selected educational lending brands, February 24, 2013-February 23, 2014
                                                                                                • Where are people talking about educational lending brands?
                                                                                                  • Figure 42: Mentions, by page type, selected educational lending brands, February 24, 2013-February 23, 2014
                                                                                                • What are people talking about online?
                                                                                                  • Figure 43: Mentions, by topic of conversation, selected educational lending brands, February 24, 2013-February 23, 2014
                                                                                                • Brand analysis
                                                                                                  • Driving fan engagement through reward incentives
                                                                                                    • Empowering borrowers through online education tools
                                                                                                      • What we think
                                                                                                      • Consumers – Amount Owed on Educational Loans

                                                                                                        • Key points
                                                                                                          • Most don’t have student loans
                                                                                                            • Figure 44: Total amount owed on educational/student loans, by gender, January 2014
                                                                                                            • Figure 45: Total amount owed on educational/student loans, by age, January 2014
                                                                                                            • Figure 46: Total amount owed on educational/student loans, by gender and age, January 2014
                                                                                                            • Figure 47: Total amount owed on educational/student loans, by household income, January 2014
                                                                                                            • Figure 48: Total amount owed on educational/student loans, by race/Hispanic origin, January 2014
                                                                                                            • Figure 49: Total amount owed on educational/student loans, by loan originator but no longer services loan, January 2014
                                                                                                        • Minimum Monthly Loan Payments Owed

                                                                                                          • Key points
                                                                                                            • Minimum monthly payments can be hefty
                                                                                                              • Figure 50: Minimum monthly loan payments, by age, January 2014
                                                                                                              • Figure 51: Minimum monthly loan payments, by gender and age, January 2014
                                                                                                              • Figure 52: Minimum monthly loan payments, by household income, January 2014
                                                                                                              • Figure 53: Minimum monthly loan payments, by race/ethnicity, January 2014
                                                                                                              • Figure 54: Minimum monthly loan payments, by employment status, January 2014
                                                                                                          • Loan Originators and Servicers

                                                                                                            • Key points
                                                                                                              • Loan originators
                                                                                                                • Figure 55: Loan originator, by gender, January 2014
                                                                                                                • Figure 56: Loan originator, by age, January 2014
                                                                                                                • Figure 57: Loan originator, by gender and age, January 2014
                                                                                                                • Figure 58: Loan originator, by household income, January 2014
                                                                                                                • Figure 59: Loan originator, by race/Hispanic origin, January 2014
                                                                                                              • Loan servicers
                                                                                                                • Figure 60: Loan servicer, by gender, January 2014
                                                                                                            • Important Features of Loan Originator

                                                                                                              • Key point
                                                                                                                • Figure 61: Loan originator, by important features of an educational loan, January 2014
                                                                                                                • Figure 62: Loan originator, by important features of an educational loan, January 2014 (continued)
                                                                                                            • Attitudes Toward Educational/Student Loans

                                                                                                              • Key points
                                                                                                                • Attitudes toward educational/student loans
                                                                                                                  • Figure 63: Attitudes toward educational/student loans, by gender, January 2014
                                                                                                                  • Figure 64: Attitudes toward educational/student loans, by age, January 2014
                                                                                                                  • Figure 65: Attitudes toward educational/student loans, by household income, January 2014
                                                                                                                  • Figure 66: Attitudes toward educational/student loans, by student loan amount owed, January 2014
                                                                                                                  • Figure 67: Attitudes toward educational/student loans, by amount paid monthly, January 2014
                                                                                                              • Attitudes Toward Employment and Loan Repayment

                                                                                                                • Key points
                                                                                                                  • Attitudes toward employment and loan repayment
                                                                                                                      • Figure 68: Attitude toward level of employment and loan repayment, by gender, January 2014
                                                                                                                      • Figure 69: Attitude toward level of employment and loan repayment, by age, January 2014
                                                                                                                      • Figure 70: Attitude toward level of employment and loan repayment, by household income, January 2014
                                                                                                                      • Figure 71: Attitude toward level of employment and loan repayment, by student loan amount owed, January 2014
                                                                                                                      • Figure 72: Attitude toward level of employment and loan repayment, by race/Hispanic origin, January 2014
                                                                                                                      • Figure 73: Attitude toward level of employment and loan repayment, by amount paid monthly, January 2014
                                                                                                                  • Important Features of an Educational/Student Loan

                                                                                                                    • Key points
                                                                                                                      • Important features of an educational/student loan
                                                                                                                        • Figure 74: Important features of an educational/student loan, by gender, January 2014
                                                                                                                        • Figure 75: Important features of an educational/student loan, by age, January 2014
                                                                                                                        • Figure 76: Important features of an educational/student loan, by household income, January 2014
                                                                                                                        • Figure 77: Important features of an educational/student loan, by Hispanic origin, January 2014
                                                                                                                    • Appendix – Other Useful Consumer Tables

                                                                                                                      • Amount owed on student loans
                                                                                                                        • Figure 78: Total amount owed on educational/student loans, by generations, January 2014
                                                                                                                      • Loan originators
                                                                                                                        • Figure 79: Loan originator, by generations, January 2014
                                                                                                                      • Loan servicers
                                                                                                                        • Figure 80: Loan servicer, by age, January 2014
                                                                                                                        • Figure 81: Loan servicer, by gender and age, January 2014
                                                                                                                        • Figure 82: Loan servicer, by household income, January 2014
                                                                                                                      • Attitudes toward educational loans
                                                                                                                        • Figure 83: Attitudes toward educational/student loans, by employment, January 2014
                                                                                                                      • Attitudes toward employment and loan repayment
                                                                                                                        • Figure 84: Attitude toward level of employment and loan repayment, by gender and age, January 2014
                                                                                                                        • Figure 85: Attitude toward level of employment and loan repayment, by generations, January 2014
                                                                                                                    • Appendix – Social Media

                                                                                                                      • Brand usage or awareness
                                                                                                                        • Figure 86: Brand usage or awareness, January 2014
                                                                                                                        • Figure 87: Sallie Mae usage or awareness, by demographics, January 2014
                                                                                                                        • Figure 88: National Education Loan Network (NELN) usage or awareness, by demographics, January 2014
                                                                                                                        • Figure 89: Citibank usage or awareness, by demographics, January 2014
                                                                                                                        • Figure 90: Wells Fargo usage or awareness, by demographics, January 2014
                                                                                                                        • Figure 91: Discover usage or awareness, by demographics, January 2014
                                                                                                                        • Figure 92: US Department of Education usage or awareness, by demographics, January 2014
                                                                                                                      • Activities done
                                                                                                                        • Figure 93: Activities done, January 2014
                                                                                                                        • Figure 94: Sallie Mae – Activities done – I have contacted/interacted with the brand online on social media to, by demographics, January 2014
                                                                                                                        • Figure 95: Sallie Mae – Activities done – I follow/like the brand on social media because, by demographics, January 2014
                                                                                                                        • Figure 96: Sallie Mae – Activities done – I have researched the brand on social media to, by demographics, January 2014
                                                                                                                        • Figure 97: US Department of Education – Activities done – I have researched the brand on social media to, by demographics, January 2014
                                                                                                                      • Online mentions
                                                                                                                        • Figure 98: Online mentions, selected educational lending brands, Feb. 24, 2013-Feb. 23, 2014
                                                                                                                        • Figure 99: Sallie Mae key social media indicators, February 2014
                                                                                                                        • Figure 100: US Department of Education key social media indicators, February 2014
                                                                                                                        • Figure 101: Wells Fargo key social media indicators, February 2014
                                                                                                                        • Figure 102: Citibank key social media indicators, February 2014
                                                                                                                        • Figure 103: Discover key social media indicators, February 2014
                                                                                                                        • Figure 104: Nelnet key social media indicators, February 2014
                                                                                                                    • Appendix – Trade Associations

                                                                                                                      Companies Covered

                                                                                                                      • Bank of America Corporation
                                                                                                                      • Citibank
                                                                                                                      • Education Finance Council (EFC)
                                                                                                                      • JPMorgan Chase & Co
                                                                                                                      • National Association of Student Financial Aid Administrators (NASFAA)
                                                                                                                      • Nelnet, Inc.
                                                                                                                      • The College Board
                                                                                                                      • Wells Fargo & Company

                                                                                                                      Educational Lending - US - March 2014

                                                                                                                      £3,199.84 (Excl.Tax)