Authors

Emily A. Andruska, The Federal Reserve Bank of ChicagoFollow
Jeanne M. Hogarth, Center for Financial Services InnovationFollow
Cynthia Needles Fletcher, Iowa State UniversityFollow
Gregory R. Forbes, Iowa State UniversityFollow
Darin R. Wohlgemuth, Iowa State UniversityFollow

Do You Know What You Owe? Students' Understanding of Their Student Loans

Short Title

Do You Know What You Owe?

Abstract

Using a data set that augments a student survey with administrative data from the Iowa State University Office of Financial Aid, the authors posed two questions: Do students know whether they have student loans? Do students know how much they owe on outstanding student loans? We used logistic and ordered logit regressions to answer these questions. Results suggest that although the majority of students are aware that they owe on student loans, many underestimate the amount they owe. One eighth of students in the current study reported no student debt when, in fact, they had a loan. Over a quarter of the students underestimated the amount they owed by less than $10,000, and nearly one tenth of students underestimated the amount that they owed by more than $10,000. This article discusses the roles that counselors, educators, and policy makers can play in improving students’ understanding of their student loan debt.

Recommended Citation

Andruska, Emily A.; Hogarth, Jeanne M.; Fletcher, Cynthia Needles; Forbes, Gregory R.; and Wohlgemuth, Darin R. (2014) "Do You Know What You Owe? Students' Understanding of Their Student Loans," Journal of Student Financial Aid: Vol. 44 : Iss. 2 , Article 3.
DOI: https://doi.org/10.55504/0884-9153.1222
Available at: https://ir.library.louisville.edu/jsfa/vol44/iss2/3