For the Millennial generation, it seems that death and taxes are no longer the only certainties of the world. As of 2017, Millennials bear the highest student loan debt burden compared to any other generation, and with Gen Z close at their heels in joining the workforce; the fears of paying off student loans will only increase.
What Does This Mean for the Workforce? Not only does student loan debt worry the employee who owes the debt, but it also affects the workforce as a whole: rising student loan debt hurts an employee’s focus at work. A recent poll by the Student Loan Ranger's organization, American Student Assistance, of 502 workers between 22 and 33 years old shows that employers are not helping their workers bear the crutch of their student loans. According to the American Student Assistance Poll, 74% of the respondents report that their employer does not offer any benefits to help their employees pay off these loans, despite the fact over half of the respondents say that repaying their student loans would be the most important benefit to them if they were offered it.
As more and more employers require college degrees, those that adopt student loan benefits will receive valuable benefits of their own. By offering their employees assistance in repaying their student loans, employers can increase productivity in the workforce and find new, committed, and more qualified workers faster, while also cutting costs on hiring these new employees. Nearly 90% of these young employees say they would commit to a job for five years in return for help with their student loans, and nearly 80% would take advantage of free access to a student debt loan counselor provided by their employer.
While only about 4% of employers offer student loan assistance today, the future is bright for students with debt—Willis Towers Watson reporting that 26% of U.S. employers will offer student loan repayment by 2018, and that percentage is growing on a steep curve. Just as companies keep their clients’ needs at the forefront of their minds, employers who help satisfy the needs of their employees—by helping them repay their hefty student loans—create work environments that are more productive and meaningful.
How should the economic development community participate in this discussion?
Tweet @boyettesa and share your ideas
In ten separate posts, Boyette will describe issues that are contributing to a Workforce in Crisis.