Table of Contents
Scope and Themes
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- What you need to know
- Data sources
- Consumer study data
- Advertising creative
- The following is a list of abbreviations used in this report.
- Terms
- Companies mentioned in this report:
Executive Summary
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- Industry overview
- The consumer
- Marketing strategies and product innovations
Insights and Opportunities
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- Key points
- Lenders, educators should target older students as population ages
- Grad students make better, more satisfied customers
- Hispanics are growing strongly, but need special attention
Inspire Insights
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- Trend: No Degree, No Problem
- What we've seen
- Industry application
- Trend: Extend my Brand
- What we've seen
- Industry application
Market Size and Forecast
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- Key points
- Student debt is fastest-growing consumer loan segment
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- Figure 1: Total consumer debt outstanding by type of loan, Q4 2011
- Figure 2: Per capita consumer debt by type of loan, Q4 2011
Competitive Context
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- Key points
- Federal government now dominates the student loan market
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- Figure 3: New student loans, Uncle Sam versus private lenders, 2007-08 and 2010-11
- Figure 4: Total cost of a college education, 2010-11 academic year
- Average cost of college drops in most recent year
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- Figure 5: Average cost of a college education, 2007-11 academic years
- Grants & scholarships pay a larger share, but student debt holds steady
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- Figure 6: How America pays for college, 2010 versus 2011
- About one third of families use student loans, mostly from the U.S.
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- Figure 7: Funding sources for college, 2010-11 versus 2009-11
Is There An Educational Loan Crisis?
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- Key points
- Student loan borrowers are in crisis
- Student loans not dischargeable in bankruptcy
Marketing Channels
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- Key points
- Sallie Mae is one of few companies with a presence in social media
Market Drivers
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- Key points
- College age population is expected to shrink in coming decades
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- Figure 8: U.S. population projections by age groups, by percent share of population, 2010-50
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- Figure 9: U.S. population projections by age groups, total numbers, 2010-50
- Hispanics are likely to make up a larger share of student loan borrowers
- Hispanics are an underserved niche, but lenders need to be cautious
Leading Companies
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- Key points
- Sallie Mae
- Discover
- Citigroup
- Wells Fargo
- J.P. Morgan Chase
- First Marblehead Corporation/Union Federal
- SunTrust
- U.S. Bancorp
- PNC Financial Services
- Citizens Financial Group/Charter One
Brand Qualities
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- Key points
- Brand name means relatively little to student loan customers
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- Figure 10: Importance of factors in satisfaction with student loan originator and servicer, December 2011
- Brand recognition is slightly more important to men than women
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- Figure 11: Importance of factors in satisfaction with student loan originator and servicer, by gender, December 2011
- Brand name is more important to college-age respondents
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- Figure 12: Importance of factors in satisfaction with student loan originator and servicer, by age, December 2011
- Higher income people less interested in brand recognition
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- Figure 13: Importance of factors in satisfaction with student loan originator and servicer, by household income, December 2011
- Brand name less important to those with advanced degrees
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- Figure 14: Importance of factors in satisfaction with student loan originator and servicer, by education, December 2011
- Brand name is more important among Hispanics, other races
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- Figure 15: Importance of factors in satisfaction with student loan originator and servicer, by race/Hispanic origin, December 2011
Innovation and Innovators
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- Key points
- U.S. Bank offers incentives for good grades and graduating
- Sallie Mae launches suites of insurance services for students
- Discover offers new loans for graduate students
- Discover donates $10 million to get financial education into schools
- Sallie Mae offers mobile access for banking customers
Marketing Strategies
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- Key points
- Student loan lenders do very little marketing
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- Figure 16: Student loan marketing pieces, January 2011-January 2012
- Representative direct and email advertising
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- Figure 17: Sallie Mae email ad, December 2011
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- Figure 18: Citibank email ad, January 2012
- Figure 19: Wells Fargo email ad, December 2011
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- Figure 20: Sallie Mae email ad, December 2011
- Figure 21: Fastweb email ad, September 2011
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- Figure 22: PrivateStudentLoans.com email ad, November 2011
- Figure 23: Alliant Credit Union direct mail ad, August 2011
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- Figure 24: Discover/AAA direct mail ad, August 2011
- Figure 25: PNC email ad, August 2011
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- Figure 26: Chase Select Private Student Loan direct mail ad, August 2011
- Figure 27: CharterOne direct mail ad, August 2011
The Consumer and Student Loans
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- Key points
- About one in five respondents have some student debt
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- Figure 28: Total amount owed on student loans, December 2011
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- Figure 29: Total amount owed on student loans, by gender, December 2011
- Youngest group has the most loans
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- Figure 30: Total amount owed on student loans, by age, December 2011
- Middle income households have the most debt
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- Figure 31: Total amount owed on student loans, by household income, December 2011
- Blacks, Hispanics are more likely to have student loans
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- Figure 32: Total amount owed on student loans, by race/Hispanic origin, December 2011
- Graduate students are the most indebted
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- Figure 33: Total amount owed on student loans, by education, December 2011
- Full- and part-time workers have the most debt
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- Figure 34: Total amount owed on student loans, by employment, December 2011
The Consumer—How Big is The Burden of Monthly Payments?
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- Key points
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- Figure 35: Monthly payment for student loans, December 2011
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- Figure 36: Monthly payment for student loans, by gender, December 2011
- Youngest respondents have lowest payments
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- Figure 37: Monthly payment for student loans, by age, December 2011
- Highest earners have the biggest monthly payments
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- Figure 38: Monthly payment for student loans, by household income, December 2011
- Graduate students have big monthly loan payments
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- Figure 39: Monthly payment for student loans, by education, December 2011
- Hispanics, other races tend to have lower monthly payment loads
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- Figure 40: Monthly payment for student loans, by race/Hispanic origin, December 2011
The Consumer—Student Loan Providers
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- Key points
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- Figure 41: Institution for origination of student loans, December 2011
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- Figure 42: Institution for origination of student loans, by gender, December 2011
- Sallie Mae is most popular lender among 25-34 age group
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- Figure 43: Institution for origination of student loans, by age, December 2011
- Middle-income group favors government loans
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- Figure 44: Institution of student loans, by household income, December 2011
- Sallie Mae is favored by other races/ethnicities
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- Figure 45: Institution of student loans, by race/Hispanic origin, December 2011
- Sallie Mae is most common loan servicer, followed by U.S. DoE
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- Figure 46: Current student loan servicer, December 2011
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- Figure 47: Current student loan servicer, by gender, December 2011
- Sallie Mae is more likely to service loans for 25-34 age group
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- Figure 48: Current student loan servicer, by age, December 2011
- A quarter of grad students pays their bills to other lenders
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- Figure 49: Current student loan servicer, by education, December 2011
The Consumer—Satisfaction with Originators and Lenders
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- Key points
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- Figure 50: Level of satisfaction with student loan originator and servicer, December 2011
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- Figure 51: Level of satisfaction with student loan originator and servicer, December 2011
- Middle-income earners are most satisfied with their loan originators
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- Figure 52: Level of satisfaction with student loan originator and servicer, by household income, December 2011
- Hispanics, other races rate lenders and servicers higher than other groups
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- Figure 53: Level of satisfaction with student loan originator and servicer, by race/Hispanic origin, December 2011
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- Figure 54: Level of satisfaction with student loan originator and servicer, by race/Hispanic origin, December 2011
- The higher the degree, the higher the satisfaction level
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- Figure 55: Level of satisfaction with student loan originator and servicer, by education, December 2011
The Consumer—Many Are Worried They Can’t Pay Debt
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- Key points
- 25% of student borrowers are behind on their payments
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- Figure 56: Percentage of respondents behind on student loan payments, December 2011
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- Figure 57: Percentage of respondents behind on student loan payments, by gender, December 2011
- Older borrowers are just as likely to be delinquent as younger borrowers
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- Figure 58: Percentage of respondents behind on student loan payments, by age, December 2011
- Likelihood of default drops with income, but is still quite high
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- Figure 59: Percentage of respondents behind on student loan payments, by household income, December 2011
- 40% of Hispanic borrowers say they are late on payments
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- Figure 60: Percentage of respondents behind on student loan payments, by race/Hispanic origin, December 2011
- Higher education correlates with better payment record
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- Figure 61: Percentage of respondents behind on student loan payments by education, December 2011
- But having a job doesn’t necessarily mean you’re not in trouble
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- Figure 62: Percentage of respondents behind on student loan payments, by employment, December 2011
The Consumer—Attitudes About Student Debt
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- Key points
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- Figure 63: Attitudes concerning student loans and current life situation, December 2011
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- Figure 64: Attitudes concerning student loans and current life situation, by gender, December 2011
- Young more worried about paying loans, but think it’s worth the cost
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- Figure 65: Attitudes concerning student loans and current life situation, by age, December 2011
- Having money doesn’t reduce worries about student debt
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- Figure 66: Attitudes concerning student loans and current life situation, by household income, December 2011
- Hispanics, other races more worried about their debt
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- Figure 67: Attitudes concerning student loans and current life situation, by race/Hispanic origin, December 2011
- Highly educated still worried about their student loans
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- Figure 68: Attitudes concerning student loans and current life situation, by education, December 2011
- Having a job doesn’t reduce worries about paying loans
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- Figure 69: Attitudes concerning student loans and current life situation, by employment, December 2011
Appendix—Trade Associations
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