Why Student Loan Repayment Isn’t (Just) About Student Debt
Imagine you have a workforce full of rising young employees eager to pick up skills that would be good for their careers and your company.
But there’s a catch -- an obstacle that’s keeping them from reaching their goals.
Wouldn’t you remove it if you could?
The obstacle in this case is student debt. And for prospective learners, it’s a formidable roadblock.
“Almost half of young adults have student loan debt,” wrote CNBC recently. Worse, “this year’s graduating seniors will allocate up to 9% of their pre-tax salary to loan repayments.”
That’s nearly $400 a month for the next 10 years.
Debt Repayment: More Than An Employee Benefit
No surprise that the debt is leaving a trail. In one study, 55% of respondents agreed that “I would like to go to graduate school, but couldn't take on any more student loans.”
It’s the reason debt repayment is more than just an employee benefit; it’s also an important part of an overall education strategy.
Why? Just consider the domino effect of decade-plus debt payments:
It diminishes learning opportunities: Young employees say they value development even more than pay raises.
It sinks employee engagement: Less advancement makes for a more dispirited workplace.
It compromises employers: No learning for employees means no updated skills employers so desperately need.
Those are big dominoes.
Cut an employee’s debt-repayment period in half (as a strategic plan can do), and you’ve not only improved financial wellness; you’ve also freed budgets for people to use the tuition assistance you’ve so carefully created to earn those future skills, and energize their careers.
So while college debt is inarguably a personal finance problem for employees; it’s more than just that. It’s also a skills problem for employers. One worth solving.
A decade or more of payments is chasing current and future students away from the skills your organization sorely needs. And in the current talent market, that’s a problem too big to ignore – but one you can do something about.
Student Loan Benefits: Identifying the Right Approach
Watch our webinar to learn how you can design and implement the right student loan benefits program for your organization.
May 8, 2019