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Factors Contributing to the Financial Self-Efficacy of Student Loan Borrowers

Factors Contributing to the Financial Self-Efficacy of Student Loan Borrowers Financial self-efficacy is associated with positive financial behaviors. This study investigated factors associated with financial self-efficacy among student loan borrowers based on original data collected through an online national survey of student loan borrowers between age 25 and 75. Results revealed that perceived student loan literacy prior to accruing higher education debt was significantly associated with current financial self-efficacy, while general financial literacy during repayment did not appear to be correlated with financial self-efficacy. This study draws on social cognitive theory to suggest that student loan literacy prior to accruing debt may act as a mastery experience, improving financial self-efficacy when the repayment period arrives. Given the increasing prevalence of student loans across all generations, this study underscores the need for early education and mentoring from financial professionals about student loan borrowing. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Counseling and Planning Springer Publishing

Factors Contributing to the Financial Self-Efficacy of Student Loan Borrowers

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Publisher
Springer Publishing
Copyright
© 2021 Springer Publishing Company
ISSN
1052-3073
eISSN
1947-7910
DOI
10.1891/jfcp-19-00067
Publisher site
See Article on Publisher Site

Abstract

Financial self-efficacy is associated with positive financial behaviors. This study investigated factors associated with financial self-efficacy among student loan borrowers based on original data collected through an online national survey of student loan borrowers between age 25 and 75. Results revealed that perceived student loan literacy prior to accruing higher education debt was significantly associated with current financial self-efficacy, while general financial literacy during repayment did not appear to be correlated with financial self-efficacy. This study draws on social cognitive theory to suggest that student loan literacy prior to accruing debt may act as a mastery experience, improving financial self-efficacy when the repayment period arrives. Given the increasing prevalence of student loans across all generations, this study underscores the need for early education and mentoring from financial professionals about student loan borrowing.

Journal

Journal of Financial Counseling and Planning – Springer Publishing

Published: Dec 21, 2021

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