By Vince Passione

Image of students laughing while studying

For millions of U.S. students, the decision about how to finance their education has consequences that can impact their financial health for the rest of their lives. Yet, a recent survey reveals that although obtaining a student loan is relatively easy, finding information on the best options for financing is hard. Borrowers need more financial literacy around the student loan process.

The survey results lead to a clear conclusion: students need to be better educated about their loan options and the impact of their debt obligations after graduation for us to address the financial strain of our nation’s $1.5 trillion student loan debt.

Borrowing is Easy, Understanding Your Choices is Hard

The survey of 2,390 Americans over age 18 was commissioned by LendKey Technologies and completed by YouGov in March 2019. Among the key findings: three-quarters of borrowers who have borrowed education funds from public and private lenders described the approval process as very easy (35%) or easy (40%). However, the survey also disclosed that 54% of borrowers had less than sufficient information to know what their payments and obligations would be when the time came to repay their student loans.  This included a staggering 49.3% who said at the time they signed their student loan paperwork they were not aware of what their monthly payment would be after graduation, a number that rose to 90% for 18-34-year-olds.

It’s equally disappointing that most borrowers have limited loan options presented to them. Just 22% said their school provided a range of lender options, both through the federal government and private lenders. More than 40% said they had only one financing option provided, while 9% said they had multiple options through their academic institution, but no additional information about outside lenders.

This tells us that most students are unaware of loan products that may be more suitable for their needs – or more affordable over the long-term. Borrowers have a lack of information on options available from private lenders for financing or refinancing their student loans, which could help lower interest rates or extend payments to make them more manageable. Similarly, borrowers may not be aware that unlike federal student loans, which only have fixed interest rates, private student loans can offer fixed or variable rates. These borrowers may be missing an opportunity to have lower monthly payments during the early repayment years when they are starting their careers.

The High Cost of “Not Knowing”

The fact that most student borrowers don’t know the ultimate cost of their loans – or the choices that might make financing more affordable – has consequences not only for those borrowers, but for our nation’s economy. According to Federal Reserve Bank of New York data, 1 in 4 Americans over the age of 18, or an estimated 44.7 million people, have student loan debt.[1] One study suggests that it can take 19.7 years for a graduate of a four-year college to pay off their student debt – meaning that some borrowers are paying off student loans into their 40s and even later.[2]

This long-term debt burden has widespread ramifications for a borrower’s quality of life, as well as the broader economy. For example, many indebted graduates delay homeownership or car purchases. Similarly, high levels of student loan debt may preclude a person from saving for retirement or even from setting aside funds for the education of his or her children.

Improving Borrower Education

A hopeful sign revealed by the survey is that borrower education seems to be improving. A greater percentage of younger respondents reported having helpful information. The share of respondents ages 18-34 who said they received loan advice was 69%, up from 63% among those 35-54 year-olds and 56% of those 55+.

It’s critical to ensure that today’s and tomorrow’s students don’t become part of the student debt crisis. To do that, everyone involved in the lending process – lenders, financial aid advisors, and schools – should prioritize making education and information available to borrowers. Quality education should begin with sound advice, not only about the best course of study, but also the best means of how to finance it.

Download The State of Student Loans Report to learn more.





Vince Passione headshot in an office setting. Vince smiles, wears a suit and button-up shirt with white hair and eye glasses.

Vince Passione is the founder and CEO of LendKey, the market’s most advanced lending platform and network, and a veteran technologist for financial services companies. Before LendKey, Vince was the COO of DealerTrack, the nation’s first and largest automotive credit portal. He has also been the President of Ameritrade’s Institutional Client Division, the CEO of, the CTO of Citigroup’s US Consumer Bank and a Business Unit Executive at IBM.  Vince received his B.S. from Polytechnic University. 

Education Lending
Refinance and Consolidation