The company I worked with had brought in an external team to do preliminary user research and a first prototype for how they could position themselves in the student debt market. I signed an NDA to work with them, so all identifying information has been removed from this case study.

The team that came in created a prototype that focused on peer to peer lending, targeting undergraduates and retail investors, and offering education to the undergraduates and some degree of transparency to investors.

Process

We first reviewed the research done and preliminary prototype created by the previous team, and came up with a list of assumptions to test:

Undergradute Students are the Target Market

The previous team had done in-person user interviews with undergraduate students and determined that, while they were interested in student loans, they didn't know much about shopping for a loan. 

We had doubts about focusing on undergraduate students, especially if we wanted to pursue a peer to peer lending platform. While they were the end user, we thought it was more likely that parents would be the parties responsible for choosing and paying for the loan.

Investors are Interested in the Student Debt Market

We had concerns that investors would be interested in either peer to peer lending or investing in a pool. Not only would investments in a single student carry a high risk profile, consolidated security backed assets, while possibly less risky, still carry the stigma of the 2008 housing crisis.

Before proceeding we wanted to do market research as well as in person user interviews to ascertain what risks and rewards retail investors saw in the student debt market.

Education is Integral

The previous team identified a need for education around loans in undergraduate students. We wanted to pursue this in parallel to our research on investing to see where the two paths made most sense to intersect, as well as look at the different education needs of undergraduate students and graduate students.

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Student Debt

Rapid prototyping

Task

Iterate on an existing prototype based on user feedback and market research

Background

From the research we did on the market, we confirmed our concerns about undergraduates as a target market and the difficulty of finding investors. 

Most undergraduate loan resources were geared towards parents and in speaking with parents and undergraduates, they confirmed that parents are usually responsible for securing, cosigning, and paying part of or the majority of an undergraduate student loan.

We looked at other companies in the space and found a few interesting examples, including Earnest. Earnest was of specific interest because while it had done well in acquiring customers, helping hundreds of people refinance their student debt, they were in financial trouble. They have $100 million in acquired debt that they're having issues finding investors for.

Based on this, we decided that for our prototyping we would focus on:

  1. Building a tool that focused on education, since we didn't have research supporting an investment tool
     

  2. Considering graduate students as our target market, since they were more likely to be looking for a loan for themselves
     

  3. Investigating retail investors attitudes and interests in investing in the student debt market

In reviewing the work done previously, we found an early draft of a loan calculator that included extra information like expected salary and cost of living to help students understand how a loan would affect their life after their degree. We decided to build this out into a full prototype.

Before designing the first prototype, I defined my goals for the calculator:

Before designing the first prototype, I defined my goals for the calculator:

  • Easy to use + understand

  • Focused on graduate students​

  • Able to be used by other interested demographics

    • Undergraduates

    • Parents

    • Teachers / Institutions

Goals for Calculator

Based on these goals, I focused on making the process of entering information and seeing the results as easy as possible. Below are some of the screens from the first mock-up, created in Sketch.

Progress bar to clearly show number of steps
Simple demographic + personal questions
Submit button greyed out until all info is input
Routes people to appropriate screens / allows us to choose who to offer loans to
Screen will move forward automatically once all info is input
Font color changes when filled out
Submit button color changes when all info is input
Back button to easily return to previous screen / change info
Sliding scales to adjust payment per month and term of loan
Bar graph to illustrate principal + interest paid over life of loan
Pie chart to show percent of monthly income spent on loan payment
Buttons to easily add new loan terms to the chart / clear the chart
Adding new loan terms to bar graph / pie chart allows for easy comparison
Personally address person
Clear instructions
Include questions to help estimate income / cost of living 

After showing the mock-up to my team and getting their feedback, I created our prototype. Rather than splitting the steps into separate pages, I kept everything on the same page so it would be easy for users to scroll back to the information they put in, make changes, and return to their new results.

Below are some screens from our prototype:

Clear title and cheery greeting
Kept the clean, simple inputs
Kept input fields + clear instructions
Submit button greyed out until all info is input
Prompt to finish inputting information (and a red herring)
Kept progress bar and made it vertical to flow down the page
Submit button highlighted when information is complete
Stacked bar graphs to easily compare principal vs. interest across multiple loan providers
Stacked bar graphs to see how monthly loan payments affect take-home pay
Clickable scale of set years to compare interest based on length of loan
Estimated yearly income based on occupation and location

We also did user interviews with retail investors. Here are our takeaways from the interviews:

​​

  • Interested in higher yields/income, if risk can be spread/mitigated

  • More interested in a pooled investment option vs peer to peer lending

  • Want transparency, especially around fees and costs

We had users test our prototype by getting quotes for two different schools. They were allowed to switch between graduate and undergraduate flows, and were encouraged to talk out loud. These are our takeaways from the testing:

  • Great learning tool as an introduction to loans and also to shop for loans.

  • Want a tool where you can easily compare loan options.

  • Important to users whether a loan is government or private.

  • Want to be walked through entire process, treat user as beginner.

  • Overwhelmingly, would use this tool for information.

Moving forward with the project, my recommendations are:​

  • Differentiate undergrad + grad resources

    • Graduate students are more interested in their monthly payments​

    • Undergraduates and their parents are more interested in looking at the interest over the life of the loan

  • More step by step instructions + explanations

    • Clearer labeling of the year scale​

    • More explanation of why information is asked for (occupation, where they plan to live, etc.)

    • More explanation of what the graphs mean and how they change depending on the length of the loan