Johnson, C. L., O’Neill, B., Worthy, S., Lown, J. M., Bowen, C. F. (2016). What are student loan borrowers thinking? Insights from focus groups on college selection and student loan decision making. Journal of Financial Counseling and Planning, 27(2), 184-198.
Brief Description: This study used data from online focus groups to understand college students’ decision-making process when borrowing money to finance their education. Respondents were asked eight questions regarding their college selection and student loan decision-making. Results suggest that (a) students relied heavily on advice from parents, guidance counselors, and friends; (b) attending college was not possible without student loans; and (c) students knew very little about the loans they would be responsible for repaying.
Implications: The collected qualitative data paints a picture of students who felt they had no other choice but to borrow money to invest in their human capital to secure a better future. Financial educators and counselors should help student loan borrowers make informed decisions about education and debt. The authors determined the following areas to be important for practitioners: simplify student loan decisions; provide “reputation resources”; increase loan repayment awareness; increase online student loan resource awareness; address the social and emotional impacts; explore cost reduction alternatives; explore differentiation techniques; discourage frivolous spending of student loan refunds; explore graduate school funding resources; and encourage immediate savings.