Student Loans and their Effects on College Consumption
University of Illinois at Urbana-Champaign
Dr. Mary Arends-Kuenning
Student loans are becoming more of a problem for college students across many
campuses’ nation wide because of increasing tuition costs and decreasing amounts of
grants and scholarships. Data was collected from a campus online survey and focus
groups were conducted with University of Illinois Students, both methods focued on
student loans and how they affects a college student’s consumption. The results of the
research have shown that college students at this university are not worried about their
student loans and it does not affect their current consumption greatly, but does affect
larger purchase decisions slightly. This finding has shown that college students should
possibly be more aware of their student loans while attending college.
As tuition has significantly increased over the past 20-30 years, it has become
very common for college students to finance their education through loans. Tuition has
become so expensive that it has become near impossible for a student to pay for their
education by working. As a result, many students graduate college with thousands of
dollars of debt waiting to be paid off. Debt from student loans has become a common
reality and something students nowadays just accept. People believe that a college
education is worth the price tag because it leads to a good job and higher earnings.
The purpose of this research project is to find out more about the connection
between student loans and consumption. The research sets out to answer if students
spend more or less if they have a loan and their reasoning behind some of their decisions.
It is hypothesized that most college students just accept the fact that they are in debt.
They do not worry about their loans because they expect to make a decent salary after
they graduate and believe they will be able to pay the loans back later in life. In addition,
it is expected that students with loans are more likely to be in credit card debt and hold
jobs. Regardless of what the data indicates, something needs to be done about the rising
cost of tuition. Students also need to be made more aware of the dangers of debt before
entering college so they can make better financial decisions.
There is a vast assortment of literature on student loans and debt that particularly
emphasize the situations of young people. Anya Kamenetz is the author of “Generation
Debt,” a literature work on the debt problems 18-34 year olds face. She goes into detail
on how student loans have been and will continue to negatively affect student’s financial
and educational decisions because the cost of attending college has been increasing. In
addition, the author Jeffrey Williams wrote “Student Debt and the Spirit of Indenture,”
and compares student loans to indentured servants of England in the 1600’s because of
increasing pressure to pay off loans. Both authors use very similar statistics and analysis
to describe the environment of higher education and its effects that they are having on the
current and climbing population of young people. The findings were very similar, and
each author takes strong stances on policies that affect college students, and will be
Each author has found that the real cost of college has been increasing over the
last two to three decades. The price of college has risen faster than inflation for the last
three decades and faster than family income for the last fifteen years. The cost of college
for the average American family is increasing at unprecedented rates because of state
budget cuts and lack of funding for grants. Two out of three students enrolled in college
in this nation have to finance their way through college using student loans. In 2004, the
average college senior graduate had an astounding $19,200 in debt. There are many
different estimations of average debt, some ranging higher or lower than others, but
$19,200 seems to be a moderately conservative estimation of debt for an average
graduate. In addition, the average indebtedness on credit cards for college students is
$2,169 with over 90% of graduating seniors having a credit card. With student loans
being harder to obtain, it is agreed that many students have had to place their loans on
their credit cards to be able to finance their education.
These statistics show how much debt average college students are holding, and
appears to be problematic. Increases in tuition are affecting the rate at which college
students are borrowing, as well as an increase in need for high school students to get a
college education. Many estimates have put the lifetime earnings differentials of a
college graduate and a high school graduate at over $1,000,000 in life time earnings.
46% of 24 year olds in the top quintile of earnings had bachelor’s degree, versus 8% of
college graduates in bottom quintile, showing the need to get a bachelor’s to assure a
higher income stream. With this being said, the cost of not getting a college education
can be very expensive over a lifetime, causing increases in amounts of high school
students to attend college. In 1970 there were seven million college students, and just
thirty two years later in 1992, there were fourteen million, despite of an increase of three
million total populations from 36-39 million. Getting a degree is no longer getting an
education, but becoming an investment towards future earnings potentials.
Another problem that college students are facing is the shrinking amounts of
grants being given to students. In 1971 45% of aid from the government came in the
form of student loans, and 52% came in the form of a grant. There has been a reversal in
this trend, however, and in the late 1990’s just 41% of aid came in grants and 58%
through student loans. During the budget cuts from the federal government in the 1990’s,
the federal government found it to be less costly to give out more federal loans versus
grants. During college, the federal government pays for your interest, and the interest
does not start until six months after graduation and decided to use this method as its
primary source of funding. In 1972, the prestigious Pell Grant covered 72% of costs for a
college student, and in 2004 just 36% of costs were covered.
With less amounts of grants being given out, students must pick up the bill by
taking out loans. Often private loans are the solution because it is becoming harder to
get a student loan through the federal government. The private loan industry has
becoming an extremely profitable industry. In 1995 the private loan industry grew from
$1.1 billion to $15 billion in 2005 and many companies recorded record profits during
this time period. Private loans are often used and are much riskier and costlier than
federal loans to students. Private loans offer much higher interest rates (often nearing
commercial loan rates), no deferments, no grace periods, and fewer repayment options.
In the 2007-2008 school years an average University of Illinois graduating senior
had $17,938 in debt. Comparably, in 2003-2004 a graduating senior had only $13,994 in
debt from the student financial aid office, so these figure do not even count private loans
taken out. In just a four year period, the average debt increased by nearly four and a half
thousand dollars, and with a net increase of over 29% (located in Appendix G, is the full
table). This has been caused by increases in tuition over time at this university because
of state cuts and increases in projects such as the ARC and many other campus wide
projects. In this four year period the amount borrowed went from around $83 million to
nearly $122 million, which was an increase of 40.5% in this short time period. The
increase of students over this time period increased as well, and went from 5,785
graduating seniors students to 6,892. The percentage of the students that borrowed
stayed fairly steady that went from 48% to 51%, so the university is giving the same
percentage of funding for student loans, but has to offer it to over a thousand more
students paying higher tuition costs. As we can see, there has been a sharp increase in the
amount of students while keeping the same percentage borrowing that is making students
in our university needing to borrow more money. Information on private loans is rarely
available because of the vast assortments of banks that offer private student loans, so
these figures only include state and federal aid.
In order to gather quantitative and qualitative data about the effect of having
tuition loans s on college spending, we conducted three focus groups with university
undergrad students as well as analyzed data from an online survey. The online survey
was a multi-topic class collaboration of 103 questions; 33 were directed towards our
topic. In order to send out this survey via a university email list, it had to be approved by
Rhonda Kirts who is the Associate Dean of Students. She reviewed the questions to make
sure they were appropriate and valid. The survey was sent by Campus Information
Technologies and Educational Services at the University of Illinois (CITES) to a sample
of 4,753 students who were selected to represents a 10% sample of the university. The
sample was selected by the office of Carol Livingstone, Associate Provost and Director,
Division of Management Information. The email that was sent is viewable in appendix A.
421 students responded to the survey, which is an 8.9% response rate and a .89%
response from of the entire university. Appendix B lists the exact questions from the
survey we chose to analyze. Students answered basic demographics such as year in
school, race and gender so we could consider if there was any significant difference
among demographics, the sample is analyzed in the sample section of the paper. We also
asked about different types of income like summer or school jobs or parent’s support to
see if this had an effect on loan size. The survey also asked students to estimate the
amount of their loan upon graduation and how long they think it will take to pay it back.
The survey allowed us to get numbers that may be more difficult in a focus group
because asking about income and loan amounts is a subject that is very personal to some
students. We analyzed the trends of the survey in the results section of this paper and
discuss the implication of the data in the discussion section.
In addition to collecting survey data, we chose to conduct three focus groups to
get qualitative data and personal experiences from University of Illinois Undergrads.
Focus groups were an excellent way of gathering information that surveys can not always
get. Surveys limit the choices or manner of answering a question and may misrepresent
the participant. Focus groups are also different than an interview because interviews do
not capture the socialized disclosure that come from group behavior. In a focus group, the
moderator asks the group a question and leaves the floor open for a group discussion.
This allows participants to encourage one another and causes them to disclose more
information (Krueger and Casey, 2000). We initially planned on doing four focus groups,
three with students who have loans and one with students with no loans. By doing focus
groups with those with and without loans separately, we would be able to capture the
opinions of both groups with fewer conflicts of opinions.
The recruitment process was difficult, and we were forced to take more than one
approach. Our initial plan was to hand out a survey that would help us pick a diverse set
of students. This survey is viewable under appendix C. We went to the Courtyard Café in
the Illini Union to pass out recruitment surveys. We chose the Courtyard Café since there
are always a mixed group of undergrads who are usually in-between class and therefore
less likely to mind filling out a survey. To incentivize students to fill out a survey, we
offered them candy bars. Before filling out the survey, they were also given the option to
read our research project information form which is viewable in appendix D. We were
able to gather 43 surveys from about an even number of males and females and a good
mix of ages. The most important information on the survey was to find out if they had a
loan, and if so, to what amount. We also asked if they would be willing to participate in a
focus group and what their available times were. To our surprise, about half of the people
surveyed said they were willing to meet. We decided to invite everyone that agreed to
meet since we thought the response rate might be low. A copy of the email we sent is
located in appendix E. Since this was our first attempt to gather a focus group, we
decided to offer a very attractive incentive. Participants of our group would receive
refreshments of pizza as well as a $10 gift certificate to Best Buy—at the time we didn’t
realize gift cards were not allowed. We offered two different possible times and told them
they must respond to take part in the discussion. Sadly, we only received a response from
one person who was willing to meet. In hindsight, the requirement may have been at a
busy time for students in the semester. We tried to conduct these focus groups the week
before thanksgiving break which is a hectic time for students due to midterms and
projects. Because of the overwhelming lack of willingness to participate, we were forced
to take an alternative approach to recruitment. We decided each group member would be
responsible for conducting one focus group and would recruit participants that were our
own personal acquaintances. Everett moderated a group of two seniors and two juniors all
of which were males. Peter moderated a group of six male seniors. Joe moderated a group
of males, three sophomores and one senior. Each of the moderators provided pizza, soda
and snacks for their participants. Discussions lasted for about a half hour each.
Participants signed proper consent forms and the sessions were recorded and transcribed.
The online survey was sent out to 4,753 students in an attempt to gather data from
a set of students that numerically represented the student body. The university is 64%
Caucasian, 13% Asian/ Pacific Islander, 7% Hispanic, 7% African American, 6%
Foreign, 2% Unknown race and less then 1% Native American. The sample sent was
targeted towards 41% Caucasian, 9% Asian/ Pacific Islander, 5% Hispanic, 4% African
American, 40% Foreign, 1% Unknown race and less then 1% Native American. We see a
significant difference in the amount of foreign students targeted for this sample, 40%
compared to 6%. Although this would not have been our preferred target sample, we
were sharing this survey with another group that was studying only international students.
Therefore, our survey was sent out to every single international student, 1899 in total.
The response of 421 students were 55% Caucasian, 17% Asian/ Pacific Islander, 4%
Hispanic, 1% African American, less then 1% Native American and 23% “other”. The
response sample was fairly close for the majority groups: Caucasians, 55% compared to
64% and Asians, 17% compared to 13%. However, there was a large amount of students
that classified themselves as “other”. It was found that 92% of those that claimed to be
“other” were international students. We decided to omit all responses from international
students and leave them out of our analysis. Although the study of international students
and loans may be interesting, it was not congruent with our thesis. After this adjustment,
the response, although small, is a fairy good representation of the student body.
Another important demographic of the survey was year in school, gender, and
major. The sample response was very even among all years: 28% freshmen, 23%
sophomore, 24% junior, and 25% seniors represented the sample response. Gender was
also fairly close but with a slight overrepresentation of females. The University is 47%
female while the survey was 55% female. For Major’s, the largest representation was
from LAS students at 39%, then Engineering at 24% then General studies, Business and
Agricultural studies all made up 8% as well. University of Illinois is made up of 41%
LAS, 17% Engineering, 10% business, 6% General studies and 8% ACES. We can
clearly see there are no large biases in response rate and major or year in school.
The university survey came out to be a good representation of our campus;
unfortunately, it was more difficult to recruit a proper sample for our focus groups. Of the
14 people we conducted focus groups with, all were men. We had 0 freshmen, 3
sophomores, 2 juniors and 9 seniors. Each focus group was held with students who had
loans. The original intent was to have a forth focus group with students without students
loans to be used as a comparison. Although there was room for improvement, we still
gained value from the discussions. Of course, it would have been better to have half the
sample made of females, we had to do the best we could with the low willingness of
Quantitative Results from the survey
Out of the 274 students surveyed, roughly 46% responded that they had a loan.
Table 1 shows a breakdown of the loan amounts. Part of our research question was to see
if tuition loans were an issue that students worry about. In order to get some data on this
topic, a question on the online survey asked “to what extent are you worried that you will
not be able to pay off your student loans?” Students were given the option of ‘very
worried’, ‘somewhat worried’, or ‘not worried’. Out of the 127 students who had a loan
14% were very worried, 48% were somewhat worried, and 37% were not worried. Table
2 provides a cross table that compares the amount of the loan and the extent to which the
student is worried about paying the loan back. Although our data suggests that not that
many students are worried about paying their loans back, the majority of students who
answered that they were “very worried” about paying off their loan had a loan amount of
Our survey also gave us some results on if having a loan affects consumption.
The question “which of the following best describes how you think having student loans
affects your consumption now?” was asked and students had the option of replying with
‘It increases consumption a lot’, ‘It increases consumption by a little’, ‘No effect’, ‘It
Decreases consumption by a lot’, and ‘It decreases consumption by a little.’ The results
of this question are illustrated in Table 3. The majority of students who answered this
question (57.65%) said that having tuition loans had no effect on their consumption.
22.45% students responded that it decreases their consumption by a little. In order to find
out if the loan amount played a role in how students consumption is affected, we made a
cross table with both variables. The results are provided in Table 4. Generally it seems
that loans do not significantly affect student’s consumption. Based on the data, students
who notice a decrease in consumption also happen to have a student loan. As the loan
amount gets larger the data suggests that students decrease their consumption
Students’ employment was another factor that was included in the survey. The
employment results are included in Table 5. 52.55% of students surveyed did not hold a
job. Part time jobs were most common among students and 36.13% of students said they
currently held a part time job. Table 6 shows the relationship between having a job and
having a loan. There doesn’t seem to be any relationship between the two variables.
Less than 2% of students surveyed had a full time job. The survey also considered
students who worked in the summer of 2008. 81.75% of students surveyed worked in the
summer of 2008. There was not much of a correlation between having a loan and
working in the summer of 2008. 47% of those who worked in the summer had a student
loan, while 53% did not. Of those that did not work in the summer, 44% had a loan while
56% did not.
Credit card information was another aspect of student spending that was included
in the survey. Based on the survey results, students on average had one credit card. The
students were asked if they were in credit card debt and to what extent, based on a
numerical range. The results of this question are provided in Table 7. 88.83% of
students answered that their credit card debt was less than $100, while 3.72% of students
said they had credit card debt of over $1,000. 6 out of the 7 students who responded that
they were in credit debt over $1,000 also had a student loan. In addition, students who
were in credit card debt of $500 or greater were also more likely to have a student loan.
Table 8 shows a cross table of credit card debt and whether or not a student has a loan.
Another component of our research dealt with future expectations and plans after
graduation. When asked questions about their expectation of earnings after graduation,
the average amount students responded with was $50,249 with a minimum amount of $0
and maximum amount of $250,000. On the topic of plans after graduation, 49.8% of
students planed to work full time, 26.65% are planning on getting a masters degree,
14.13% plan on getting a Ph.D or M.D., 4.46% planed on going to law school, and 5.95%
answered “other.” This information is provided in Table 9.
Qualitative Results from Focus Groups
The participants in the focus groups were all students, varying age and
demographics, but all three focus groups conducted had participants who had student
loans. In the three focus groups conducted, we asked them several questions about their
student loans and how it affects their consumption as college students.
One of the first questions we asked our participants was if debt generally is a
problem for college students. Many people agreed that it was a problem, but it is very
necessary to take to be able to afford a good education. For many of our participants,
debt was necessary because it was an investment in their education creating higher
potential future earnings justifying taking on debt. One participant said, “debt is just
something Americans as a whole learn to live with, like going to college, buying a
house—got to take out a loan.” In general, our findings found that debt was a necessary
part of life and there is no way getting around it, however, there are good and bad debt
such as credit card bills versus student loans. Student loans were considered as good debt
and credit card debt seemed to be unnecessary at times because it is so easy to round up
massive credit card bills that often take years to pay off because of the high interest rates.
One of the questions we asked students, were the priorities of paying off their
student loans. Our respondents expressed a sense of urgency to pay off their debts. One
student said, “Mostly it will come down to is how fast you can start paying it back. So
don’t spend a lot. Cut back your lifestyle.” The respondents were all anxious to pay off
their loans so they would not accrue high amounts of interest. Additionally, the
participants agreed that their spending is of high concern, however, they were not that
inclined to set budgets but rather constraints on the way they spend money. Most of our
participants had some sort of job, whether during the summer, winter break, or during the
school year. We saw that most of money generated from these time periods is used to
finance personal spending, such as going out to eat or a movie, versus their fixed costs of
rent and students loans. One participant said, “My paycheck in the summer was 75%
savings.” Many large fixed expenses such as rent and utilities, tended to come from
student loans or parents support. Students that had summer jobs, tended to try to save as
much as they could for the school year.
Budgeting was another issue that we asked our participants and we found that no
one had a structured budget, rather a general basis of spending. One participant summed
this general finding with this response:
I don’t have anything written down, I just try to keep the
general track of what I have in my bank account, just try to
stay within a specific amount. I don’t think any college kid
has a real good budget; most are probably like me that just
have a general idea of what is too much and what’s okay.
Participants do not write down expenditures or rarely kept track of spending. Students
tended to create an allotment of money and make that last as long as possible by being
frugal or finding ways to cut back on expenses. “I don’t really have a budget, it’s more
of a restriction. If I go out a lot one week and go grocery shopping, then ill kind of lay
low for awhile before I start spending a lot of money again.”
Our most important findings were our participant’s student loans, and their
general feelings about how it affects them currently and their ability to pay off their debt
in the future. As we mentioned earlier, students feel the urgency to pay off their student
loan as fast as possible out of college, but when asked if any of their current income goes
towards loan payments, most participants responded they just will pay back their loans
after college and current income is meant for discretional use. “I don’t really pay much
attention to my loans, I am just going to deal with it after college when it’s over,” seems
to be the consensus among our focus group individuals. Student loans to our participants,
even with varying ages of individuals, all agreed that their student loans were not of
current concern and are only a problem after graduation.
With the participant’s student loan repayment in mind, we then asked the
individuals about their current consumption compared to if they had no loan. Our
findings have been that a student’s loan does not affect on how they currently consume
daily normal goods and their routine purchases. “I really think for me personally to fret
about how much money I’m spending is a waste of energy because I’m going to spend X
amount of dollars to live here and enjoy it.” We found overall, that student loans do not
affect every day purchases like groceries, movies, going out, and other nominal
purchases. However, some participants did express that if they did not have a loan they
would most likely make big ticket purchases such as a car or TV that they could not
normally afford because of their loan.
Finally, we asked our participants about their future expected earnings and how
the current economic situation is affecting them. For many of the participants in the
focus groups, we found that the younger students, freshmen and sophomores, tended to
be less worried about finding a job after graduation because there is more time for the job
market to turn around. However, for juniors and seniors, there was more concern. One
participant said, “I’m worried about the future and landing a secure job. So I can’t be
spending all the money I have now…so I’m going to play it pretty conservative now.”
For the participants without a job lined up, there was more concern because without a
salary and steady job security, those participants are preparing to expect the worst.
Based on our findings from our focus groups and online surveys, we have come to
the conclusion that while in college students are not particularly worried about their
loans. The majority students who responded to the online survey were not worried about
their loans, by a large margin. In addition to that, from our focus groups most of our
participants expressed that student loans were not something they would worry about
until after they graduated. It was interesting to see that as the amount of loans increase
there was somewhat of a correlation between being worried or not. This shows that while
students are not particularly worried about their loans it is something that they somewhat
think about and have in the back of their minds. We found that students were quick to
mention factors that affect how they will pay back their loans after school but no one had
an active plan to currently begin payments.
Another main topic of our research was to examine the effect of loans and current
student consumption. As we predicted and according to our online survey, many of the
students responded that student loans do not slow down current consumption. However,
there is a slight connection between people having high amounts of student loans and
decreased consumption but nothing that lead us to believe that these two variables are
strongly correlated. As mentioned in the focus group results, when asked if students did
not have loans and whether or not it affects their consumption, it does not affect their
short term consumption. Some participants cited minor spending changes in luxury
goods if they had no student loans.
One more topic of our research was to examine student loans and current
employment. Both our online survey and focus groups indicated that having a part time
job is mainly for discretionary spending and is not used to pay off student loans.
Students that have a part or full time job are not more likely to have student loan which
disproves one of our hypotheses that students with a loan are more likely to hold a job.
Perhaps some reasons for this is that tuition is so expensive it is impossible to finance
their way through this university with a typical college student job. The majority of
students surveyed responded they did not have a job and is most likely because students
are more focused on completing their degree and do not want any outside distractions.
The relationship of credit cards and student loans was another topic we addressed.
Our hypothesis was that students who had a loan would be more inclined to be in credit
card debt and have higher monthly balances. However, most students that responded to
our survey were not in any kind of dangerous credit card debt. In fact, 21 out of 188
respondents had credit card debt greater than $100. Our hypothesis was partially correct
because the majority of students who were in high levels of credit card debt also had a
One of the reasons we originally thought that students in college were not worried
about their loans was because they had high expectations of future wages. Our reasoning
was correct as our online survey indicated that the average expected salary was $50,249.
However, during our focus groups some of our participants expressed worries about the
job market and were very pessimistic about earning the salaries they expected. On the
topic on the current economic crisis, more students responded on getting secondary
higher education. Only about 50% of students planned on working full time out of
college and 25% are getting masters. The high amounts of students getting secondary
higher education maybe due to the worries of the job market and way to wait out the
Overall, our research provided insight and allowed us to make some implications
about student loans and spending habits, however, we did encounter limitations to our
research. It was difficult to recruit strangers to take part in focus groups. We believe that
our budget of $100 limited the incentives we could have offered students. Perhaps with
more funding we could have made the discussions more appealing and would have
experienced a higher response rate. In our online survey, respondents were asked to fill
out the survey at their own time expense, and there was no incentive such as a possibility
of winning $50, which could have raised our response rate from 8% to a higher
percentage. Of the surveys we did receive, we had a large representation of international
students, which were not useful results. Also, many students left answers incomplete
which made some analysis difficult. Some students even contradicted their own responses
in the survey. For example, some students said they didn’t have a loan, but then answered
questions about how they were worried about paying them back, or giving additional loan
In addition, when recruiting for our focus groups, we had a large amount of
surveys filled out and many respondents seemed enthusiastic about attending our focus
groups. However, when we emailed them with a time to meet, we had very low response
rates and not enough respondents were willing. Since we used our focus groups with
acquaintances, our focus groups were not a proper random sample of the university.
Since we used the snowball approach to recruitment, we were limited to conducting focus
groups with males which could have biased some responses.
Another problem we encountered was finding information pertaining to private
student loans. The information we found on student loans came from the financial aid
services and did not have information on private loans since private loans are set up
between a student and another bank or lending company. This would make the average
student loan data we found to be lower than what it would be because of the lack of
representation on private loans. Additionally, in our online survey students were given a
range for their student loans which made them hard to average. Thusly, it was impossible
to find the average student loan from the survey and information available from the
Although we ran into some challenges while conducting our research such as
difficulties recruiting for focus groups and less than desired amounts of online survey
participants, we were still able to draw a few conclusions about student loans and
spending. We found that students are not particularly worried about their student loans
while attending college. It was also found that a large increase of student loans only
decreases spending by a small amount, and does not increase the likelihood of holding a
job. In addition, students have a high expectation of future earnings and use that as a
justification for current consumption therefore viewing their debt as non current issue.
Because of this, students want to be able to pay off their student loans however they do
not have a plan or budget to be able to pay off their loans earlier than expected.
This research has implications towards students on this campus because students
are not in a particular hurry or have a set plan to pay off their loans. Students generally
accept the fact that they are going to be in debt. The rising cost of tuition has become so
expensive that most students are forced to take out extra private loans to finance their
way through school. Americans are so in debt in general and have a negative net savings
rate and the high cost of education is making this problem worse. Higher education is
now an investment towards an individual’s lifetime earnings. Authors like Anya
Kamenetz argue that higher education is a public good and should not be a private
investment. We feel that policies need to be in place to help students avoid such high
amounts of student debt, whether through more federal funding, more grants and tuitions,
or lower tuitions. More research needs to be done to figure out new policies to alleviate
financial pressure on students.
Kamenetz, Anya. Generation Debt : How Our Future Was Sold Out for Student Loans,
Bad Jobs, Nobenefits, and Tax Cuts for Rich Geezers--and How to Fight Back. New
York: Riverhead Trade (Paperbacks), 2007.
Krueger, Richard A., and Mary Anne Casey. Focus Groups : A Practical Guide for
Applied Research. Minneapolis: SAGE Publications, Incorporated, 2000.
Williams, Jeffrey J. "Student Debt and The Spirit of Indenture." Dissent (2008): 73-78.
APPENDIX A: Survey Invite
Subject line: Let your voice be heard!
Invitation to participate in an online survey of University of Illinois undergraduate
Hi! We are students in ACE 398. As part of our course requirements, we are conducting
an online survey of University of Illinois undergraduate students. The survey covers the
topics of your spending on food and textbooks, your use of the new ARC, how tuition
loans affect your spending, and how you chose to attend the University of Illinois.
So, how will we use the information we collect from you? In addition to our course
papers, we plan to write up short papers with our findings. Administrators at the
university are very interested in our research. You could benefit, too, as we can use our
findings to inform students about how to save on textbooks and food.
Please help us out and click on the link below to access our online survey. It shouldn’t
take you more than 30 minutes to complete, and it would mean a lot to us.
Thank you so much!
<Student names here>
APPENDIX B: Online Survey
9. Do you currently have a job?
Yes, part-time on campus
Yes, full-time on campus
Yes, part-time off campus
Yes, full-time off campus
Please put "0" if you do not work during the school year.
10. How much do you earn each week in your job during the school year on average?
11. Did you work during the summer of 2008?
12. If yes, how much did you earn on average per week during your summer 2008 job?
13. Which of the following sources of income do you have currently? Check all that apply.
Past summer job/internship
14. What is your best estimate of the total income you received from October 1,2007 to September 30, 2008? Be sure to include
earnings from jobs as well as interest earnings or dividends.
15. Approximately how much is the annual income of your parent(s)? Give your best guess.
16. Do you have a student loan?
17. If yes, how much will you have in student loans when you graduate?
$0 - $4,999
$5,000 - $9,999
$10,000 - $19,999
$20,000 - $29,999
18. If yes, have you started to pay any of your loans?
19. How many years do you think it will take for you to pay off your loans?
20. Which of the following best describes how you think having student loans affects your consumption now?
Increases consumption by a lot
Increases consumption by a little
Doesn't affect consumption now
Decreases consumption by a little
Decreases consumption by a lot
21. To what extent are you worried that you will not be able to pay off your student loans?
Not worried at all
22. Do you receive any kind of financial aid?
23. If yes, how much do you receive per year?
24. How much is your total tuition and fees per year?
25. How much do you spend on room and board per year? (or put down your spending on rent and utilities, if applicable)
26. How do you pay for your tuition? (Check all that apply)
27. How many credit cards do you have?
28. If you use credit cards, what are your average monthly bills?
$0 - $49.99
$50 - $199.99
$200 - $499.99
$500 - $999.99
29. If you have outstanding bills, how much do you owe towards all your credit cards?
$0 - $99.99
$100 - $199.99
$200 - $499.99
$500 - $999.99
30. What do you plan to do in the year after graduation? (choose only one option, the one you are most likely to pursue)
Pursue a Masters degree
Pursue a Ph.D. or M.D. degree
Pursue a law degree
Work full time
31. What do you expect to earn per year in your first full time job?
78. What is your gender?
79. What year are you in school?
80. What College are you currently enrolled in?
Agricultural, Consumer, and Environmental Sciences
Applied Health Studies
Division of General Studies
Fine and Applied Arts
Liberal Arts and Sciences
81. What is your major?
Please refrain from abbreviations.
82. What is your age?
83. Are you an international student?
84. If yes, what country are you from?
88. What is the highest level of education completed by your mother?
Less than high school
High school graduate
Bachelor's degree (B.A. or B.S.)
Some graduate school
Advanced degree (M.A., Ph.D., J.D., M.B.A., M.S., M.D.)
89. What is the highest level of education completed by your father?
Less than high school
High school graduate
Bachelor's degree (B.A. or B.S.)
Some graduate school
Advanced degree (M.A., Ph.D., J.D., M.B.A., M.S., M.D.)
90. What is your marital status?
Please write to 2 decimal places.
91. What is your grade point average (G.P.A.)?
92. What is your race/ethnicity?
APPENDIX C: Recruitment Survey
The following survey is designed for specific use on a research project for ACE398
designed to determine the relationship between spending habits of college students and
tuition loans. This survey complies with Ethnography of the University Initiative
Email Address: email@example.com
Cell Phone Number: (_____)___________________
What year are you? (circle)
Freshman Sophomore Junior Senior
What is your college? (circle)
Business ACES Engineering FAA
LAS AHS Education COM
DGS Aviation Nursing Other- Graduate
If you are a senior, are you currently seeking a full time position upon
Do you have a loan to finance your tuition? (circle)
If yes, how much is your loan annually? (circle)
< $1000 $1,000-$5,000 $5,000-$10,000 $10,000-$20,000 >
If no, how do you finance your tuition? (circle)
Parents Financial Aid
Other (please specify):____________________________
Do you currently have a job? (circle)
If chosen would you be willing to participate in a focus group that will meet one time for
approximately an hour? Students will be compensated for their time. Details to follow
When is the best time for you to meet? (Check all that apply)
Sunday Monday Tuesday Wednesday Thursday Friday Saturday
APPENDIX D: Information Form
RESEARCH PROJECT INFORMATION FORM
Hi. Our names are Peter Comes, Joe Franzwa, and Everett Sommer, and we are students
in ACE 398, a research methods class that is part of the Ethnography of the University
initiative here at the University of Illinois. ACE 398 is taught by Professor Mary Arends-
Kuenning. We are conducting a research project that examines student loans and their
effect on spending habits of college students.
We are distributing a contact information form to find participants in focus group
discussions about tuition loans and spending habits. If you are interested in participating,
please fill it out and return it to us. The focus group discussions will take about 1 to 1.5
hours of your time. The information you provide will be kept confidential.
If you do participate, you will be provided with refreshments.
If we choose you for a focus group, we will contact you and send you a survey and a
consent form. Please bring the survey and consent form to the focus group discussion
location. If you do not participate in a focus group, we will destroy your contact
Your participation in this research project is entirely voluntary. Your participation in the
study will not affect your grades or academic standing in your program in any way. You
will not be penalized in any way if you do not participate. There are no known risks in
this study beyond those of everyday life. However, it is possible that we might
sometimes talk about personal matters related to your spending habits or time use, and
you might therefore feel uncomfortable having the discussion taped. You don’t have to
answer any questions you don’t want to and you can stop the discussion to ask questions
at any time. Also, we can stop the tape at any time if there are portions of the discussion
you prefer not to be recorded.
We ask that all participants in the focus group respect the privacy of the session and do
not repeat what other participants say when outside the focus group. However, we cannot
guarantee that all participants will respect other participants’ privacy and confidentiality.
If you have any additional questions, Professor Arends-Kuenning would be happy to
answer them. She can be reached by phone at 217-333-0753 or e-mail at
firstname.lastname@example.org. Should you have any questions concerning research subject's rights,
you can contact the University of Illinois Institutional Review Board Office, 1-01-(217)
333-2670; e-mail email@example.com. The Institutional Review Board is the office at the
University of Illinois responsible for protecting the rights of human subjects involved in
studies conducted by University of Illinois researchers. You are welcome to call collect
if you identify yourself as a research participant.
We hope that you will volunteer to participate in our research project.
APPENDIX E: Focus Group Invite
We are writing to you in response of a survey that you recently filled
out. We are conducting focus groups to aid us in our research that
deals with student loans and their effect on spending habits. Your
participation will tremendously help us with out project.
The group should take no longer than an hour. Pizza and refreshments
will be provided and participants will receive a $10 gift card to Best
The times we have set are as follows:
Wednesday, November 19 at 6:30 PM in 313 Mumford Hall
Thursday, November 20 at 6:30 PM in 313 Mumford Hall
Please respond to this email if you would like to participate and give
the time that works best for you.
Thank you in advance for your participation,
Peter Anthony Comes
University of Illinois
Consumer Economics and Finance
APPENDIX F: Data Results from Online Survey
Break down of Loan Amounts Relation
Amount Student Loan Frequency Percentage
$0-4,999 83 38.25
$5,000-$9,999 20 9.22
$10,000-$19,999 45 20.74
$20,000-$29,999 23 10.6
$30,000+ 46 21.2
Total 217 100
Relationship between Loan Amount and being worried about loan
Amount of Loan Very Worried Somewhat Worried Not Worried Total
$0-$4,999 0 6 56 62
$5,000-$9,999 0 8 12 20
$10,000-$19,999 4 21 20 45
$20,000-$29,999 4 13 6 23
$30,00+ 11 23 12 46
Total 19 71 106 196
How Tuition Loan affects consumption
Effect on Consumption Frequency Percentage
Increases a lot 5 2.55
Increases a little 13 6.63
No effect 113 57.65
Decreases a little 44 22.45
Decreases a lot 21 10.71
Total 196 100
Effect on Consumption based on Loan amount
Increases Increase Decreases Decreases
Amount of Consumption Consumption No Consumption Consumption
Loan A lot a little Effect a lot a little Total
$0-$4,999 0 1 55 5 2 63
$5,000-$9,999 0 1 14 5 0 20
$19,999 3 4 18 13 7 45
$29,999 0 4 8 8 3 23
$30,00+ 2 3 18 13 9 45
Total 5 13 113 44 21 196
Employment Break Down
Job-Type Frequency Percentage
Part-time on campus 99 36.13
Full-time on campus 2 0.73
part-time off campus 27 9.85
Full-time off campus 2 0.73
No Job 144 52.55
Total 274 100
Table 6 Table 7
Relationship between having a loan and having a
job Breakdown of Credit Card Debt Amount
Credit Card Debt
Has Loan Amt. Frequency Percentage
Job-Type Yes No $0-$99.99 167 88.83
Part-time on campus 48 51 $100-$199.99 4 2.13
Full-time on campus 1 1 $200-$499.99 4 2.13
Part-time off campus 17 10 $500-$999.99 6 3.19
Full-time off campus 2 0 $1000+ 7 3.72
No Job 59 85 Total 188 100
Total 127 147
Table 8 Table 9
Relationship between Credit Card Debt amount and Having a
Loan Plans After Graduation
Credit Card Debt Amt. Yes No Total Plans Frequency Percentage
$0-$99.99 79 88 167 Masters 69 25.65
$100-$199.99 2 2 4 PhD or MD 38 14.13
$200-$499.99 2 2 4 Law 12 4.46
$500-$999.99 5 1 6 Job 134 49.81
$1000+ 6 1 7 Other 16 5.95
Total 94 94 188 Total 269 100
APPENDIX G: University of Illinois Student Loan Info
Seniors Who Student Loan
Number of Number of Borrowed Debt of
Graduating Student % Student Graduating %
Year Seniors % increase Borrowers increase Loans Seniors increase
2003-04 5,785 --- 2,754 --- 48% 13,494.00 ---
2004-05 6,535 12.96% 3,219 16.885% 49% 14,776.00 9.50%
2005-06 6,494 -0.63% 3,297 2.423% 51% 15,641.00 5.85%
2006-07 6,896 6.19% 3,500 6.157% 51% 17,058.00 9.06%
2007-08 6,892 -0.06% 3,478 -0.629% 50% 17,938.00 5.16%
Net increase 18.47% Increase 24.836% net Increase 29.57%
Year Borrowed % Increase
2003-2004 83,434,981 ---
2004-2005 97,997,807 17.454%
2005-2006 111,372,929 13.648%
2006-2007 121,824,395 9.384%
Net Increase 40.487%