Research of the Week: Student Loan Payments Might be the Top Gift of 2018

More than Bitcoin, Amazon Prime and the iPhone X, borrowers want help with student loan payments.

Each week, Consolidated Credit searches for financial research that can help you deal with your debt and budget. This week…

The interesting study

Student loan debt has become the most serious financial challenge facing millions of Americans. With average debt over $35,000 per borrower at graduation, it’s no wonder these loans are at the top of people’s minds.

So much so in fact, that LendEDU wondered if people would prefer student loan payments over other top adult gifts for Christmas. So, they asked 1,000 student loan borrowers if they’d prefer top gifts to using that money to make a student loan payment on their behalf.

The big result

There is only one gift that student loan borrowers would prefer over a single payment on their student loans. That gift?

57.3% of respondents would rather just have you hand them a $100 bill; only 42.7% said they’d want the $100 student loan payment instead.

This year, people want money under the tree, or even better, cash for student loan payments

The fascinating details

What’s interesting is that the $100 bill one, where other incredibly popular gifts lost out. The list includes Hamilton tickets on Broadway, an Amazon Prime membership. Bitcoin, and even Super Bowl tickets.

So, why did the $100 bill win where everything else lost out? Our guess is that it’s a combination of cost and need. Many of the other gifts that lost out would offer a sizeable student loan payment for the same amount of money. You’d get a $1,000 student loan payment with the iPhone and Bitcoin money. Super Bowl tickets equal out to a $3,000 payment.

At the same time, other lower-dollar gifts aren’t as valuable, because there may not be a need. For instance, Amazon Prime is around $100 and a Netflix subscription is $131. But those are both discretionary expenses – they’re wants, not needs. With the $100 bill, you could pay rent, or cover another bill that you need to pay, like your mobile plan.

What you can do

“Practical gifts may not always be the most exciting, but they can be the most beneficial and well received,” explains April Lewis-Parks, Financial Education Director for Consolidated Credit. “For instance, let’s say you buy your significant other new tires for their car. You can save them a significant expense that they’d need to find funds to cover themselves next year.

“Student loan payments are the same type of gift. It’s a burden that you take off someone’s plate. And the relief they feel may be better than the elation they get from a high-priced gift.”

So how do you gift someone a student loan payment?

  • You give them the cash for it or write a check, so they still get a physical gift to open.
  • There are services that allow you to make payments on someone’s behalf, like, but they can add sizeable fees on top of your gift.

“The best solution is usually to give the person the money directly and allow them to make an extra student loan payment,” Lewis-Parks recommends. “Making an extra payment means that the borrower pays off their loan sooner. It also reduces total interest charges paid over the life of the loan. If you make an extra payment, it is not subject to interest charges. It goes entirely to reduce principal – the actual debt you owe.”

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