Student loan debt is a recurring topic here at Millennial Personal Finance. How could it not be? One of our objectives is to educate consumers in the realm of personal finance, and one of our target demographics happens to be millennials, a group that is distinctively familiar with student loans - and distinctively undereducated when it comes to finance.
With student debt taking second place as a leading form of debt in the U.S. and Millennials representing a larger portion of the labor market every year, it’s only natural that we would look for ways to analyze how Millennials are faring with their student loans. One of those ways is asking questions.
In continuation of our analysis on student loans and their impact on advanced-degree holders, we ran yet another poll that asked some big questions about student loan repayment expectations among graduates with Master’s, Doctoral, and Professional degrees.
We were pretty happy with the results. They shed some positive light on these advanced graduates. Many of them are pretty confident in their ability to pay off their student loans, and most of them seem to understand how to tackle their student loans.
Read on to see some of the interesting highlights and data from this recent poll by Millennial Personal Finance.
Findings & Discussion
Below you will find several pieces of data and charts explaining some of the interesting finds from our poll. We wanted to ask graduate workers with student debt about their student loan repayment expectations. Thankfully, they’re aren’t so pessimistic, and a lot of them seem to have their head on their shoulders.
For starters, we asked our respondents to grade themselves on their student loan debt situation. Here are the results:
The results could be a lot worse! The majority of respondents think they deserve a “B” grade or better which followed up by a large group that graded themselves with a “C.”
With those grades in mind, the next set of results shouldn’t be so surprising. We also asked them about their repayment expectations, meaning we wanted to know whether they expected to default on their student loans. Here are those results:
Graduates with advanced degrees are confident, not pessimistic, about their student loan debt. Most of them (60.2 percent) think they have good chances of avoiding student loan default.
Given their confidence, we thought it was interesting to see how exactly these workers expected their loans to be repaid. We asked them just that; here are the results:
A solid group of respondents (33 percent) expected to make payments themselves, and 28 percent thought they could find a company that offers a student debt repayment benefit.
We thought these results were solid: many graduate workers expect to make payments themselves on their debt, and plenty are looking for a company that offers a helpful repayment benefit. The repayment benefit is an extremely helpful perk to take advantage of; furthermore, the expected earnings that come with a graduate degree have a better chance of covering monthly payments. Combining these two together is a great move as well.
Student loan forgiveness was a big consideration. 24.2 percent were banking on forgiveness to pay off their loans. We decided to follow up on this question, and we found that 75.2 percent of all respondents strongly considered a job that would qualify them for the student loan forgiveness program.
12.8 percent, a minority, planned on entering an income-driven repayment (IDR) plan. The low response was viewed as a good thing. With greater estimated future earnings, advanced-degree holders have more flexibility, control, and capability to make monthly payments, and an IDR plan could be seen as a more limiting and expensive repayment option.
Laughably, 2 percent thought their cosigner was going to help them make payments. This could be seen as a big lack of responsibility from a select group of respondents. Many of our respondents (49.4 percent) had cosigners on their loans, essentially private loans, taken out for graduate school, so a very small group of respondents thinking this way was taken as a positive signal.
One thing this question didn’t cover was student loan refinancing, an option that some graduates bank on to get a lower interest rate. So, we followed up on the idea by asking about it. 58.4 percent of working graduates strongly considered student loan refinancing with a private lender.
Graduates with advanced degrees are more likely to qualify for a helpful refinance loan, so it’s a good sign that this product is on their radar. It can save plenty of money over the life of loan repayment if an applicant can qualify for a lower interest rate.
With all that in mind, you could say that plenty of working graduates with advanced degrees understand their options with student loan repayment, and many of them think they’re in good shape moving forward when it comes to repayment success.
This is a good sign! Despite making less money or coming out with more student loan debt than they thought they would, these graduates are confident about repaying their student loans.
With that in mind, it isn’t too surprising to see that 78.8 percent would attend graduate school once more if they had to do it all over again.
This poll was conducted through an online survey and polling company known as Pollfish. The survey targeted workers who graduated from grad school with an advanced degree; they also needed to have student loan debt from paying for their education. Only graduates from the classes of 2014, 2015, 2016, and 2017 were polled, so they are mostly fresh into student loan repayment.
Full Poll Results
Q1. How would you grade yourself right now on your student debt situation?
A - 17.0%
B - 38.8%
C - 29.2%
D - 9.20%
F - 5.80%
Q2. What are your chances of repaying your student loans without entering default?
Very Good - 23.6%
Good - 36.6%
Neutral - 27.0%
Bad - 7.80%
Very Bad - 5.00%
Q3. How do you mainly expect your student loans to be paid?
I will qualify for student loan forgiveness - 24.2%
I will find a company that offers a student loan repayment benefit - 28.0%
My graduate degree salary should cover payments - 33.0%
I plan on entering an income-driven repayment plan - 12.8%
My cosigner is going to help me out - 2.00%
Q4. Have you considered finding a job that qualifies your for student loan forgiveness?
Yes - 75.2%
No - 24.8%
Q5. Have you considered refinancing your student loans with a private lender?
Yes - 58.4%
No - 41.6%
Q6. If you had to do it again, would you still attend graduate school?
Yes - 78.8%
No - 21.2%