Whatever their feelings on higher education, fewer consumers think the sometimes-massive loans incurred to get it are worth the trouble.
A report released Thursday by Mintel, a global reasearch firm, found just 20% of consumers think student loans are a good investment, down from 54% in 2012.
Mintel surveyed 2,217 Americans 18 and older.
In 2012, the majority or respondents were paying less than $300 a month (79%), and only 21% had payments over that amount. Two years later, half of respondents had monthly payments of $300 or less, and the percentage paying more than $300 every month increased to 30%. Furthermore, 5% were actually paying more than $1,000.
“Clearly there are other ways to go to school besides taking out an enormous amount of money to do so, but I think there’s also a question about the absolute value of the thousands of dollars or whatever that you’re going to spend to go to school,” Robyn Kaiserman, a financial services analyst at Mintel, told ThinkAdvisor on Monday.
She added that improvements in the economy might also contribute to falling enrollment rates at colleges. “There’s some thinking that the improvement in the economy is not helping college enrollment either, as some people who may have opted to get a job who couldn’t get a job and were going to school as their default position,” she said. “Now that there are jobs, some of those people are going to work instead of going to school, or they’re starting school and dropping out to get the work that they couldn’t get a couple of years ago.”
The survey found, however, that paying back student loans might appear to be worse than it is. Almost two-thirds of respondents in 2012 said they were having a hard time paying back their loans. That fell to 42% in 2014. The 2012 respondents were also more likely to worry that their student loan debt would prevent them from getting a mortgage than the 2014 respondents.
“I was kind of surprised by that, frankly,” Kaiserman said. “I’m sure it has to do with the economy and [how] it’s a little bit better. It feels better for a lot of people.”
Eleven percent of respondents said their student debt was between $50,000 and $100,000, according to Kaiserman, and 16% said they had debt between $10,000 and $50,000. More than half said they had no student loan debt, but that fell significantly from 2012, when 81% of respondents reported no debt, Kaiserman said.
Mintel noted that while tuitions and fees are still increasing, the rate is slowing. The rate of increase for in-state tuition and fees at four-year public institutions rose only 2.9% for the 2013-14 year, down from 4.5% in 2012-13 and 8.5% for 2011-12. The current increase is the smallest it’s been in 30 years, according to Mintel.
Although price increases are slowing down, enrollment has fallen. For the 2013-14 school year, enrollment fell 1.5% from the previous year, according to the National Student Clearinghouse, after falling 2% for the 2012-13 year.
“It’s not so much whether the college education is worth it, but whether the individual school is worth it. Is it worth it to spend $250,000 versus whatever your state university costs? Or is it better to go to the community college for two years then transfer to the four-year school? There’s a lot more conversation around that.”