This report examined how much students understand about their loans so that when they graduate they are prepared to repay their debt. The report analyzed students understanding of their own student loan debt. It analyzed students understanding of interest accrual and ability to plan for repayment and borrow accordingly. Key Findings Students are not aware of the total cost of their student loans. Most students take out loans without a clear understanding of their total cost.
Larger debt comes with lower awareness of the implications of loan debt.
Even with higher expected incomes, respondents with larger debts more significantly overestimated the percentage of their income they could afford to contribute to repayment. Students in their first years of college are at greatest risk. Students in their first years of college were more likely than those in their later years to underestimate the impact of interest. Students in their first years of college have less understanding of student loan interest and repayment. We studied four areas to determine students understanding of their loan debt and ability to plan for repayment.