Heading Off a Major Productivity Problem in Your Workplace
It might be easier than you think.
That's because every year, thousands of your working parents make big decisions that will affect their jobs, their children - and you. The race to help the next crop of high school seniors apply to college is just a few months off. And in their fevered pitch to afford it, working parents are up nights with the college guide, thinking about the one thing every parent wants (How can I guarantee my child's future?) and figuring out how to leverage everything they own to pay for that expensive dream school. Changing their approach could drastically alter their fortunes - and yours. Why? Here are four reasons.
Finances have a lot of power over the workforce.
- A Guardian study showed financial problems are sinking workforce well-being.
- Non-mortgage debt (which includes education debt) is the most damaging.
- Employees in the study called money their number-one worry.
- A SHRM study showed the financial turmoil is leaving a mark on companies, with 70% of HR professionals saying money problems were impacting employee performance.
Approaching college the no-holds-barred way is a risky bet...for everyone
In a word; it's backwards. Instead of planning a budget and financing what they can afford (as one would with, say, a house), today's families are working in reverse, choosing a school and then figuring out where to find money. And the unwise decisions (multiple loans adding up to five figures and more) will have painful consequences, especially if they run out of money before the child's degree completion (as often happens) leaving everybody with the equivalent of a mortgage but no house.
No-holds-barred approaches compromise opportunities
People who take the desperate approach to college admissions are often blind to golden, money-saving opportunities - negotiating with financial aid officers, for example. Some will even go as far as to skip financial-aid applications all together, hoping that need-aware schools will look more favorably on a student willing to pay full fare. That means no grants, more loans. It's a buy-now-pay-later decision that will last a lifetime - and one that someone should tell them to avoid.
The impacts don't stop with the student
You may have heard that new graduates have an average of $35,000 in debt. But as we pointed out recently, parents - and grandparents - are often carrying even more. And the financial strain is costly for everyone, including your company (see, "finances have a lot of power over the workforce," above).
Change is PossibleThe above is not set in stone. That's where employers come in. Most people incur so much debt only because they don't know they have options. They don't realize they should compare admissions offers. They don't know they can negotiate with finance offices or consider the long-term benefits of a lower-priced school. Advising your people about those options - providing experts in the field who can put monthly payment numbers to those expensive loans and give educated advice on whether a brand-name school is worth the cost - can put sense back into the front end of the equation. It's a practical approach that has big payoffs. As American Express told us, College Coach has been "An incredibly huge win."
Even better, it takes a major issue that you can predict for your workforce, and tackle it before it ever becomes a problem for your company.