Menu
Banking Exchange Magazine Logo
Menu

Student loans play Grinch this year

Most would choose a payment in lieu of a gift, finds borrower poll

  • |
  • Written by  Website Staff
  • |
  • Comments:   DISQUS_COMMENTS
Paying down student debt outweighs holiday cheer this season. Paying down student debt outweighs holiday cheer this season.

Early reports of holiday shopping indicate 2017 will be a banner year. Yet for one segment of the population—people with outstanding student loan debt—the upbeat holiday mood may be tempered a bit, at least by intent if not actual dollars.

With more than 44 million student loan borrowers in the land owing a total of $1.41 trillion, according to the The Student Loan Report, the debt overhang is having an effect. The Report—a website created in 2015 by Drew Cloud, a journalist struggling with his own student debt—conducted a two-question survey in early November of 1,000 student debtors currently in repayment.

Tough gift to wrap

The first question asked of student-loan debtors was: “If you had the choice this year, would you rather receive a gift this holiday season (ex. Christmas gift, Hanukkah gift, Kwanzaa gift) or an equally valued payment towards your student loans?”

In a post covering the results, Cloud said that “over two-thirds (69.30%) of respondents would prefer an equally valued student loan payment this holiday season instead of a traditional holiday present, which was the preferred option for 30.70% of borrowers in repayment.” The article indicated that the average amount owed at graduation for educational debt is $27,857.

The second question asked was: “If you receive money as a gift this holiday season, are you planning to use the money to make a payment towards your student loan debt?”

Here a slightly lower, but still comfortable majority (58.50%) said they intend to apply money they receive during the 2017 holiday season towards their debt. The remainder (41.50%) will spend the money elsewhere, according to The Student Loan Report.

If the survey respondents are representative and follow through with their intentions, there will be a few less Echo Shows, iPhone Xs, and BB-9E droids sold this season, unless other consumer segments pick up the slack.

Want more banking news and analysis?

Get banking news, insights and solutions delivered to your inbox each week.

back to top

Sections

About Us

Connect With Us

Resources