Student loan debt is the cause of plenty of headaches in this country, from aspiring nuns to the families of those straddled with a deceased loved one’s payments. So it’s a bit unsettling that a new study says many students are underestimating how much they owe — and some don’t even know they have debt in the first place. Shudder.
A financial literary study conducted by Iowa State University faculty and staff found that almost 40% of their students underestimated how much they owed, and one in eight didn’t even realize they had debt, reports the Des Moines Register.
The researchers surveyed 801 undergraduate Iowans in fall 2010 in the process of coming up with these shocking figures. The study also found that 10% of those underestimating their debt were off by more than $10,000. Those who didn’t take out any loans only accounted for 22% surveyed.
Researchers think the results suggest a need for additional financial counseling so students can fully understand what they’re getting themselves into, and that it will play a major role in their post-graduation lives.
To that effect, ISU will send emails to all of its students showing how much they owe, for the first time, this summer. It’ll also lay out their estimated monthly repayment upon graduation and a list of lenders, said Roberta Johnson, ISU director of student financial aid.
Another helpful tool will be an online calculator from the federal government debuting this summer, that will show students how much their majors will likely net them, salary-wise, and measures the impact of monthly student loan payments after graduation.
New study: 1 in 8 ISU students unaware of college debt [Des Moines Register]