How Employer Student Loan Repayment Assistance Programs Can Help Your Business (Part 1 of 3) 🤝
My name is Gerry. As a 32-year-old writer with my own mountain of student loan debt to conquer, I am fascinated by innovative benefits programs like the employer repayment assistance programs that will be the topic of this and subsequent blog articles of mine. Americans are just now beginning to see the lasting effects of the student loan debt crisis and the crushing effects it can have on the economy, the labor market, and indeed, the spirit of an entire generation.
In the midst of all this, I am hopeful for the prospect of a solution, or series of solutions, that will effectively resolve this crisis, or at least make it more manageable. Though I can hardly claim to be an unbiased or all-knowing source of information on this ever-evolving topic, it is the goal of this blog series to explore, analyze, and share the growing body of data and information on employer repayment assistance programs. I aim to provide a forum for discussion on the ways programs like this can and do benefit both the employer and the employee.
We are living in an exciting moment in time – a moment where businesses around the nation are uniquely positioned to be pioneers in making positive changes within the job market overall. The way I see it, this isn’t just about having a shiny, new HR benefit to list in one’s new employee handbook. This is about making a difference in people’s lives. I hope you share my excitement in delving into this topic.
Let’s get started…
Setting the Stage: Student Debt Crisis and How Employers Can Make a Difference
It’s clear by now that student loan debt weighs heavy on the job market. With over 44 million Americans in student loan debt topping over $1.4 trillion, is it any wonder that the labor market is so heavily burdened by a workforce stifled with anxieties about the future?
Fortunately, business owners, recruiters, and HR professionals are uniquely situated to help improve this dire situation. With the development of innovative benefits programs such as employer student loan repayment assistance programs, companies around the nation are beginning to see that they can make a positive impact in their employees’ lives and improve their company culture as a whole.
Here are three major ways that an employer student loan repayment assistance program can make an impact on your business and recruitment strategy.
How This Benefits Program Can Help Decrease Stress, Improve Health, and Boost Morale
The average graduate enters the workforce with over $35,000 worth of debt. This financial burden then bleeds into their personal lives, causing loan borrowers to delay major life decisions like buying a car or home and getting married and having children.
Getting into the math: a quick look at how student debt affects daily life
Let’s do the math real quick. Pretend you have already graduated from college and are well set on your career path and making money. The average person between the ages of 25 and 34 brings in about $40,000 a year. That’s about $3,300 per month.
You have to pay your apartment rent which, depending on where you live, comes in at around $1,000 per month. You’ll spend about $250 per month on food, and that’s being pretty thrifty if you ask me. Your utility bill will total around $200 per month. If you have a vehicle loan, that’s about $500 gone right there, minus $100 for the car insurance and about $125 for gas. And let’s not forget your monthly Internet and phone bill, which average $130 combined. That doesn’t include any of the surprise little expenses life likes to throw your way, like a flat tire or needing medicine to fight off the flu.
By the time you get around to paying your monthly loan payments, which averages around $350, you can pretty much forget about having extra money to blow or save. The media tends to portray millennials as a kind of hedonistic demographic hell-bent on frivolous spending on Starbucks lattes and Katy Perry concert tickets, but most millennials I know are just as hardworking as anyone else, and they struggle to find a bit of financial stability and comfort in their daily lives.
The psychological impact of student debt in the workplace
Student loan debt has a uniquely devastating psychological impact, perhaps because of what the numbers scenario above reveals: a tightrope effect with managing other payments, where one wrong move causes one to topple over. In a recent survey of more than 3,000 Americans, 80% of employees with student loan debt admitted that it is a source of “significant” or “very significant stress.” In a 2016 survey by IonTuition, 90% of employees recognize that student loans promote workplace stress.
As we all know, workplace stress and unhappiness is shown to have negative health impacts on employees, resulting in weight gain, a lack of sleep, decreased mental health, negative impacts on one’s personal life, and an increased risk of illness. According to the Young Workers and Student Debt survey, which polled workers between the ages of 22 and 33, 40% of employees said they worried that student loan debt negatively impacted their health.
The struggle is real.
The Hope for a Solution
A student loan repayment assistance program may be just the answer. In the 2016 IonTuition survey, 70% of employees said they believe such a program would improve workplace morale and increase employee retention rates. As illustrated in the numbers scenario above, even just a little bit of help can make a considerable difference to someone walking a tightrope.
It really doesn’t take much to make for a happier workforce.
And when your employees are happy, all kinds of good things happen! Did you know that happier employees are 12% more productive in their roles than when they are unhappy? On the flip side of that coin, unhappy employees are 10% less productive. When employees are happy with their job, everyone benefits.
There you have it. A sort of rudimentary roadmap of the ways student loan debt affects your employees on a psychological level and how that, in turn, affects your company. The numbers speak for themselves, really. I hope you will come back next week for further discussion on how this type of benefits program can make for a better workplace.
I’m a 32-year-old writer based out of San Antonio, Texas, with my own mountain of student loan debt to conquer. When I’m not working, I’m either out for a run on the trails or chilling at home with my rescue dog, Vincent (for Van Gogh, my favorite painter). I like to eat (a lot), read (I’m a real horror junkie, with Stephen King topping my list of favorite writers), watch movies (Titanic – yes, Titanic – is the be-all and end-all for me), drink wine (red only, please), travel (Italy has my heart and always will), collect crystals, meditate, and read tarot cards. Perpetually single, but a softie deep down, I try to stay true to my hippie heart and find the good in every person and situation. I remain curious and open to learning new things (except for math which, I am convinced, will always be my downfall). If I can answer any questions about my work here on student loan debt and repayment assistance programs, feel free to shoot me an email. I don’t bite (usually). [email protected]
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