Consumer Finance

The Struggle To Make Tuition Payments On Time Is Real

student loan debt

The student debt crisis is no joke — loans considered to be in “serious delinquency” continue to increase, which is why it’s not surprising that the issue has come up repeatedly in the 2020 presidential election.

Student loans now make up the largest chunk of U.S. non-housing debt and by some measures, the price of college is increasing almost eight times faster than wages.

While the price of a college education keeps climbing higher, it’s become more challenging for students and families to make tuition payments on time. Even among those who work full-time.

According to PYMNTS’ new Tuition Payments Study, half (50.5 percent) of supporters use their income to pay for college, while nearly the same amount (46.2 percent) of students pay for college from full-time jobs.

Full-time employment does not necessarily make payments easier for students or their supporters, however. The study found that 53.3 percent of students with full-time employment find it “somewhat” or “very” easy to pay for tuition, but 31.9 percent consider it “somewhat” or “very” hard to do so.

Additionally, 63.1 percent of students who are currently late on their payments work at full-time jobs and 57.4 percent are not currently late but have been in the past.

It’s no surprise that those with full-time jobs are more likely to find it “easy” to pay for tuition compared with those with part-time or no jobs. Both students and supporters who work full-time have advantages in tuition payment, but neither group always pays tuition on time.

The propensity to pay tuition late is common among both students and supporters, with equal shares (14.8 percent) reporting they are currently doing so. Digging deeper, 48.7 percent of students and 38.2 percent of supporters have experienced late payments at some point.

Figure 6 Late Tuition Payments

Of course, income has bearing on whether or not students and supporters make payments on time, but it plays less of a role than one might think.

Students and supporters in the lowest income bracket (earning below $50,000 per year) face the highest risk of experiencing late payments, with roughly half of each group — 51.6 percent of students and 50.3 percent of supporters — currently or previously behind on payments. On the other end of the spectrum, 32.5 percent of supporters earning more than $100,000 per year are currently or have been late on payments.

Counterintuitively, 54.2 percent of students who are behind on payments say paying tuition is “somewhat” or “very” easy for them. This answer is possibly a result of the process, not finding the money.

Simplifying the actual act of payment could potentially help combat the issue of late payments. A payment plan could help those who do not seem particularly concerned about deadlines to make timely payments.

Late payments aren’t just detrimental to lenders, they also have emotional and physical impacts on debtors. Nearly three-fourths (71.9 percent) of students report worrying about paying on time, 41.1 percent worry about expulsion, 34.4 percent lose focus and 31.9 percent experience stress that leads to health issues.

Overall, 90.4 percent of students and 89.0 percent of supporters say late payments affect them in some way.

Figure 11 Late Payment Fallouts

Interest in using payment services is high, considering 84.5 percent say they would be at least “slightly” interested in using tuition payment solutions and 37.2 percent would be either “very” or “extremely” so.

What do borrowers like about the idea of tuition payment solutions? Ease and convenience ranked highly with both students and supporters. A fair amount report payments solutions might lower stress levels. Data security and fraud prevention were lower priority.

Figure 14 Interest in Tuition Payment Solutions

On the flipside, 29.8 percent of students cited worries about data protection as to why they wouldn’t be interested in using a payment solution. Second (53.6 percent) only to simply preferring their current method.

Employment status was found to have influence on interest levels of payment solutions.

Those with full-time jobs are more likely to report being “extremely” interested in tuition payment solutions (19.1 percent) and this is largely because they are also more likely to struggle to pay at all. Additionally, 15.8 percent who work part-time and 14.4 percent without full- or part-time jobs say they are “extremely” interested in them.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.