Association for Public Policy Analysis & Management

In this paper, “The Effect of Student Loans on Family Finances,” researchers from TG will discuss the use of their proprietary Family Federal Education Loan Program (FFELP) portfolio data to describe the lifecycle of student loan repayment and the typologies of borrowers with different repayment behaviors. As one of the largest guarantors in the country, TG has a very large portfolio of loans about which it has detailed data showing borrower repayment patterns. TG’s research involves electronically surveying members in addition to in-depth structured interviews to help shed light on the short- and long-term financial consequences of student loans for various borrowers, including those who have been through delinquency or default. This research provides pictures of the student loan borrower experience for various types of borrowers. Research questions include: (1) What are student loan borrowers' typical repayment patterns? (2) What are the characteristics of borrowers with different repayment patterns? (3) What do borrowers know at critical decision points in the borrowing/repayment process, and how does this knowledge relate to borrowers’ repayment behavior? and (4) How do borrowers understand the relationship between their student debt and their current financial situation?