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Student Loan Debt Trends for 2018: Reaching Grads with Payment Options

Michelle Peel

Congratulations, recent college graduates! The National Center for Education Statistics estimated that during the 2017–18 school year, colleges and universities are expected to award 3.87 million college degrees. Roughly 70% of these graduates will have student loans to repay.

With the right timing, channel, personalization, and offer, student loan marketers can reach those 2.7 million with options that work for them in a way they can understand.

Student Loan Statistics Underscore the Necessity of Repayment Options

First, let’s take stock of exactly how students get saddled with loan debt and how much they’re left with after graduation. Here a few tuition and student loan debt statistics from Collegedata:

  • $9,970 ‒ average annual tuition rate for a public university
  • $34,740 ‒ average annual tuition rate for a private university
  • $39,400 ‒ average amount of debt for a new college graduate

Now, here are more staggering student loan debt statistics from Student Loan Hero:

  • 44,200,000 ‒ Americans with student loan debt
  • $1,480,000,000,000 ‒ the total amount of student loan debt they owe
  • 11.2% ‒ Student loan delinquency rate (90+ days delinquent or in default)

These figures are likely to be quite intimidating for recent college graduates. Educational lenders are helping recent college graduates navigate student loan debt repayment by offering two popular options that could help manage payments and save money: student loan consolidation and student loan refinancing.

  • As explained by U.S. News & World Report, consolidation allows qualifying graduates to combine multiple student loans into one larger loan, which the lender will pay off and replace with a new loan to finance the larger debt.
  • By refinancing, graduates with high-interest student loans work with a private lender to repay some or all of their debt at a lower interest rate, according to Student Loan Hero. When refinancing student loans, qualifying graduates are looking to obtain better interest rates, reduced monthly payments, or reduce the cost of the loan.

You Know What They Want—Now Help Them Get It with Mail

No matter how they decide to pay their loan, most graduates with student loan debt share a few basic characteristics (like age and media consumption habits) that make it easier to reach and appeal to them with messaging and offers through channels they actually pay attention to.

Direct mail is an effective marketing tool to reach recent college graduates—most of whom are millennials ages 22 to 37—as they shop for student loan repayment options. According to a recent InfoTrends study,

  • Millennials are the most likely of any generation to read direct mail.
  • Millennials are more likely to open and read direct mail based on its personalization and customization.

Furthermore, a 2016 study sponsored by the U.S. Postal Service and conducted by Summit Research found that:

  • Millennials prefer receiving direct mail rather than a telemarketing call (83%).
  • Millennials prefer a physical direct mail piece rather than an email (67%).

According to Comperemedia, more than 35.2 million student loan direct mail pieces were mailed in May 2018. This is a 12% increase when compared to May 2017’s direct mail volume of 31.4 million student loan pieces. In May, the top five mailers sent 84% of the total student loan direct mail volume. These mailers are Citizens Bank, Discover, Firstrust Bank, Sallie Mae, and SoFi. Nearly all offers observed were loan consolidation and refinance offers.

Reach Recent Graduates with Messages that Resonate

Student loan marketers are also keenly aware of the seasonality of their audience’s needs. Mail volume for just three months—June 2017, July 2017, and May 2018—accounted for 58% of the total student loan direct mail volume in the past 12 months, with more than 141.5 million pieces sent. If that trend continues, we can expect to see an increase in acquisition student loan direct mail volume in the upcoming back-to-school period of Q2 and Q3 2018.

Messaging and offers are crucial to effective student loan marketing, both for acquisition and loyalty mailings. Education finance lenders are making efforts to educate recent college graduates and potential borrowers on ways to reduce the cost of monthly payments and make payments proactively. Here are a few recent examples of student loan refinance messaging that caught my attention:

  • “Borrowers with a strong credit history may qualify for better rates than the ones they signed on for when they first took out their loans.” ‒ Laurel Road
  • “We’ve helped millions of borrowers who’ve struggled to make their student loan payments and we want to help you too. There are a number of things you may be able to do to fix your past due payments…” ‒ Great Lakes
  • “Refinance and receive a $1,000 Apple Gift Card” ‒ Citizen’s Bank
  • “45% of people would break up over debt. Refinance student loans with SoFi‒and get one free month to Match.com.” ‒ SoFi

Direct mail gives marketers a unique edge over other channels when reaching recent graduates and those with student loan debt. Here are a few direct mail best practices education finance lenders can use to attract recent college graduates and potential borrowers:

  • Personalization: As mentioned earlier, millennials are more likely to open and read direct mail based on its personalization and customization. Personalization that targets your consolidation and refinance loan messages and offers specifically for the intended borrower will add relevance, increase gross response rate (GRR), and improve return on marketing investment (ROMI).
  • Johnson Boxes: Highlight the benefits of your student loan offer compared to other education finance lenders. In addition to interest rates, include benefits such as one convenient monthly student loan payment and lower monthly student loan payments.
  • Multichannel Marketing: Drive recent college graduates to your website or mobile app to apply for your student loan consolidation and refinance offer. Always include a toll-free number so an applicant can speak to a student loan advisor if they have questions, issues, or just need additional information.

Want to hear more about how IWCO Direct can educate lenders on direct mail best practices? Call us today!

link https://www.iwco.com/blog/2018/06/29/student-loan-debt-marketing-trends-2018/
Michelle Peel

Author

Michelle Peel

Marketing and Corporate Communications Manager and graduate of Elizabethtown College. Bringing the “make it happen” attitude to IWCO Direct for more than eight years and the direct marketing industry for more than 20. Favorite recognition: When her daughter was asked in school what she wants to be when she grows up, she responded, “Just like mom.” Pittsburgh Steelers fan who enjoys dancing, shopping, and spending time with family.

More Posts by Michelle

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