04/07/2016
Millennial College Graduates with Student Loans Now Spending Nearly One-Fifth of Their Annual Salaries on Student Loan Repayments
Citizens Bank’s new Millennial Graduates in Debt study shows that
most recent graduates with student loans underestimated their monthly
payments and now expect to be making payments into their 40s
Fewer than 50 percent of Millennials making student loan payments
have explored lowering monthly payments through refinancing
PROVIDENCE, R.I.--(BUSINESS WIRE)--
Research released today by Citizens Bank shows that college graduates
aged 35 and under with student loans now are spending nearly one-fifth
(18 percent) of their current salaries on student loan payments and that
60 percent now expect to be paying off student loans into their 40s.
At the same time, fewer than 50 percent have looked into refinancing
options to lower their monthly payments, consolidate their private and
federal loans or otherwise improve the terms of their loans, according
to the Millennial Graduates in Debt survey released today by Citizens.
According to The College Board, the cost of college has increased 13
percent for public four-year colleges, and 11 percent for private
nonprofit four year college in the last five years. To help pay for
college, more than three quarters of respondents to the new Citizens
survey (77 percent) indicated they had received federal loans. One third
of respondents said they had received private student loans, which
typically are smaller and in most cases require a credit-qualified
co-signer.
“The long-term cost of college continues to be a major challenge for
Millennials, even after they have established themselves in the
workforce and significantly improved their credit from where they were
when they started school,” said Brendan Coughlin, president of Consumer
Lending for Citizens Bank. “As this generation of college graduates
starts to contemplate future life events like home purchases and
retirement, it becomes increasingly important for them to take control
of their college debt, whether it’s through refinancing or other tactics
that can help them limit its impact on their overall financial health.”
Citizens Bank is a leader in student lending and the only national bank
to offer refinancing options for both private and federal student loans
to credit-qualified borrowers. On average, its Education
Refinance Loan reduces a borrower’s student loan payments by $1,764
per year.
Citizens’ Millennial Graduates in Debt survey found graduates with
student loans grappling with the trade-offs required to make their
student loan payments every month:
-
54 percent have limited their travel
-
50 percent have limited their shopping for clothes, shoes and
accessories
-
46 percent have limited their spending on entertainment and social
events
-
45 percent have limited their spending on eating out
-
40 percent have limited the amount they can spend on rent or mortgage
payments
In light of this, some Millennials now express buyer’s remorse regarding
their college investment, with 57 percent saying they regret taking out
as many student loans as they did. More than one-third (36%) of
Millennial graduates with student loans said they would not have gone to
college if they had known how much it was going to cost them.
“Unfortunately, the long-term cost of college is leading some graduates
to question the value of their investment – in many cases, before they
have fully explored their opportunities to significantly reduce their
payments,” Coughlin said. “Similar to our approach to working with
student borrowers and their families at the front end of the college
journey, we are committed to helping graduates understand their options
and manage their debt in a way that complements their broader financial
goals.”
In addition to its Education Refinance Loan, Citizens offers a range of
borrowing options for credit-qualified students and graduates and their
families including the Citizens Bank Student Loan, the Citizens Bank
Student Loan with Multi-Year Borrowing and the Citizens Bank Parent
Loan. In most cases, Citizens lends to in-school borrowers who apply for
loans with credit-qualified co-signers. To ensure that student borrowers
fully understand the terms of their loans, Citizens includes a thorough
review of the borrower’s options (federal and private) at the front end
of the application process and sends borrowers an annual “report card”
describing how much they have borrowed to date and what their monthly
payments will be after graduation.
To learn more about Citizens Bank, call the customer contact center at
1-800-428-7463, follow the bank on Facebook
and Twitter
or visit the Citizens
Bank website.
Survey Methodology
Citizens Bank conducted a survey of 501 U.S. Millennials (ages 18-35)
who are 1) college graduates (2 year, 4 year, postgraduate or
professional degree) and 2) currently have student loans. The custom
survey was conducted online for Citizens by TNS between February 10 and
22, 2016.
About Citizens Financial Group, Inc.
Citizens Financial Group, Inc. is one of the nation’s oldest and largest
financial institutions, with $138.2 billion in assets as of December 31,
2015. Headquartered in Providence, Rhode Island, Citizens offers a broad
range of retail and commercial banking products and services to
individuals, small businesses, middle-market companies, large
corporations and institutions. In Consumer Banking, Citizens helps its
retail customers “bank better” with mobile and online banking and the
convenience of approximately 3,200 ATMs and approximately 1,200 Citizens
Bank branches in 11 states in the New England, Mid-Atlantic and Midwest
regions. Citizens also provides mortgage lending, auto lending, student
lending and commercial banking services in select markets nationwide. In
Commercial Banking, Citizens offers corporate, institutional and
not-for-profit clients a full range of wholesale banking products and
services including lending and deposits, capital markets, treasury
services, foreign exchange and interest hedging, leasing and asset
finance, specialty finance and trade finance.
Citizens operates through its subsidiaries Citizens Bank, N.A., and
Citizens Bank of Pennsylvania as Citizens Bank, Citizens Commercial
Banking and Citizens One. Additional information about Citizens and its
full line of products and services can be found at www.citizensbank.com.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160407005785/en/
Citizens Financial Group, Inc.
Steve Sylven, 781-471-1481
[email protected]
Source: Citizens Financial Group, Inc.