Employees and College Debt: Why Planning for Tomorrow’s Workforce Needs to Start Today
College debt is a big burden.
We’ve written about this before.
New and existing employees (recent grads and their parents who took on debt to help fund their kids’ educations) arrive at work every day with the weight of that debt heavy on both their minds and their wallets.
Once today’s high school seniors have earned their degrees and become employees, many will have already incurred thousands—even tens of thousands—of dollars in education loan debt. They may use this first job for training and then jump at the first opportunity to earn more money elsewhere. They may postpone buying that home or get into credit card debt to stay afloat. Their parents may delay saving for retirement or put off retiring altogether.
But what if employers could head all of this off by helping high school seniors and their parents minimize debt before they even take it on?
For many families, the culprit is lack of planning. They haven’t saved for college and think loans are their only option. Often their college lists only include schools that don’t discount their prices. Our advisors identify schools that will offer scholarship dollars so they can add some financial safeties. We also help them review their budgets to identify existing cash flow they can use to fund some of those college costs. And before they spend all of their money on their first child going to college, we push them to think through how this will impact what is available for kids two, three, and so on.
Other families simply don’t realize how much college costs, that tax-advantaged college savings accounts exist, nor that not all colleges offer deals on tuition and room and board. After speaking with our educators, they understand what the average costs will be, whether or not they will qualify for financial aid, and how colleges use merit scholarships. We explain how to negotiate for more and what borrowing specific amounts of dollars will equate to in terms of monthly payments or total interest accrued.
Our advisors talk to families every day who are on the brink of getting mired in too much education debt. Given the growing economic disparity in the US, many fear that only certain schools can set students on a path to success. They’re willing to borrow whatever is needed to get them there. Through conversations with our educators, we help them avoid this fate. At the most basic level, we help students and parents get past their fears to focus on what really matters.
The student loan problem is what happens when high school seniors and their parents take on too much debt to fund their college educations. We talk through the reality: that there are many options for a quality education that don’t require mortgaging the future, and post-college success starts when students graduate with limited to no debt.
Changing What College Costs Your Employees and Their Children
Employers have the opportunity to preserve the financial futures of not just one generation – but two. This eBook provides actionable steps that can alter financial futures for a lifetime.
May 28, 2021