“Although the ultimate destiny of federal student loan forgiveness hangs in limbo preceding a Supreme Court ruling, student loan customers have already adjusted their attitudes in anticipation of a changing educational lending landscape. Focus on interest rates has subsided in favor of customer service and digital offerings, showing that customers yearn for support during volatile times. Repayment pauses have caused a migration toward two extremes in student debt ownership – those with manageable sums that can be paid off in the near term and those stuck with large balances and no end in sight. Refinancing consideration is high, with repayment pauses scheduled to cease and strategic planning becoming an impending priority.”

–   Patrick Rahlfs, Senior Research Analyst

This report discusses the following key topics:

  • Factors in selecting a private loan option
  • Current repayment behaviors
  • Parent behaviors toward student loans
  • Student loan future payment plans
  • Existing loan amounts and repayment timing
  • Attitudes toward educational lending

Table of Contents

  1. Overview

    • What you need to know
      • This Report looks at the following areas
        • Definition
          • Market context
          • Executive Summary

              • Top takeaways
                • Consumers are prioritizing customer service over pricing concerns
                  • Figure 1: Reasons behind private student loan lender choice, by year, 2019 and 2023
                • Student loans are far from stagnant, with forgiveness and refinancing top-of-mind
                  • Figure 2: Student loan repayment planning, by generation, 2022
                • Repayment pauses have helped those with moderate debt totals
                  • Figure 3: Existing loan totals, 2022
                • Market overview
                  • Figure 4: Category outlook, 2023-27
                • Opportunities and challenges
                  • Private loan competitors can stand out in areas aside from pricing
                    • Delinquencies may rise in the near term, with savings rates plummeting
                      • Key consumer insights
                        • 52% of student loan owners are currently putting off payments
                          • Figure 5: Current student loan repayment behaviors, 2022
                        • The economic implications of student loan forgiveness polarize consumers
                          • Figure 6: Consumer attitudes toward student loan cancellation, 2022
                      • Market Size

                        • 37% of consumers have used student loans
                          • Figure 7: Higher education payment methods, 2022
                        • Total student loan debt had its first annual decrease in a decade
                          • Figure 8: Total US student loan debt, in current dollars, 2021 Q1-2022 Q3
                        • Parents have been able to contribute more to tuition in the past three years
                          • Figure 9: College funding sources, academic years 2017-18 through 2021-22
                        • An increasing percentage of loans originate from private lenders
                          • Figure 10: Federal and non-federal student loans, in inflation-adjusted dollars, academic years 2011-12 through 2021-22
                      • Market Factors

                        • Personal savings rate will stifle repayment abilities
                          • Figure 11: Personal savings rate, 2015-21
                        • Students have a significant demand for financial education
                          • Figure 12: Student resources wished for, 2021
                        • Debt is often accepted, as long as career preparation has been achieved
                          • Figure 13: Most important signs of a successful college experience, 2021
                        • New federal law enhances the appeal of 529 savings plans
                        • Competitive Strategies and Market Opportunities

                          • Sallie Mae used paid social ads to encourage FAFSA submissions
                            • Figure 14: Sallie Mae paid Facebook creative, 2022
                          • Discover offers good grade rewards on its student loan products
                            • Figure 15: Discover student loan direct mail creative, 2022
                          • College Ave Student Loans highlights testimonials throughout creatives
                            • Figure 16: College Ave student loan direct mail creative, 2022
                        • The Educational Lending Consumer – Fast Facts

                          • Factors in Private Loan Choice

                            • Backing from college outranks monetary factors
                              • Figure 17: Reasons behind private student loan lender choice, 2021
                            • Interest rates are declining in priority, while customer service is becoming vital
                              • Figure 18: Reasons behind private student loan lender choice by year, 2019 and 2022
                            • Women are more likely to defer to recommendations from college
                              • Figure 19: Reasons behind private student loan lender choice, by gender, 2022
                          • Current Repayment Behaviors

                            • More than half of student debt owners are not currently making payments
                              • Figure 20: Current student loan repayment behaviors, 2022
                            • The payment pause is allowing fewer consumers to make monthly payments
                              • Figure 21: Current student loan repayment behaviors by year, 2019 and 2022
                            • Federal student loan owners are most commonly deferring
                              • Figure 22: Current student loan repayment behaviors by loan type, 2022
                            • More than half of men are continuing to pay off loans
                              • Figure 23: Current student loan repayment behaviors, by gender, 2022
                            • Younger customers are more likely to rely on the payment pause
                              • Figure 24: Current student loan repayment behaviors, by age, 2022
                          • Parent Loan Behaviors

                            • About half of parents have paid for some of their children’s tuition
                              • Figure 25: Parent student loan behaviors, 2022
                            • Older parents have a greater ability to provide financial support
                              • Figure 26: Parent student loan behaviors, by age, 2022
                          • Student Loan Payment Plans

                            • 73% of loan owners are expecting future forgiveness
                              • Figure 27: Student loan relief attitudes and behaviors, 2022
                            • More than half of students are willing to explore refinancing options
                              • Figure 28: Student loan planning, 2022
                            • Older Millennials are most likely to have plan, consider refinancing
                              • Figure 29: Student loan repayment planning, by generation, 2022
                          • Existing Loan Amounts and Timing

                            • 32% of student loan owners have greater than $50K still to pay off
                              • Figure 30: Existing loan totals, 2022
                            • Student debt pauses have helped consumers make progress
                              • Figure 31: Existing loan totals, 2022
                            • More than half of student loan owners plan to pay off their loans within five years
                              • Figure 32: Estimated student loan repayment time, 2022
                            • Younger loan owners are more confident about short-term repayments
                              • Figure 33: Estimated student loan repayment time, by age, 2022
                          • Attitudes toward Educational Lending

                            • Consumers find student debt problematic, but largely worth it
                              • Figure 34: Consumer attitudes toward educational lending, 2022
                            • Student loan cancellation is controversial due to economic implications
                              • Figure 35: Consumer attitudes toward student loan cancellation, 2022
                            • High earners are largely opposed to student loan cancellation
                              • Figure 36: Consumer attitudes toward student loan cancellation, by income, 2022
                          • Appendix – Data Sources and Abbreviations

                            • Data sources
                              • Consumer survey data
                                • Marketing creative
                                  • Abbreviations and terms
                                    • Abbreviations

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