If you’re an established business owner or career professional, you may think employee student debt doesn’t affect you. Unfortunately, you’d be wrong. Because when something affects your employees, it affects you, too.
As parents, mentors, business owners, and hiring managers, we’ve told young people that they need a college degree to get ahead. And this may be true. College graduates will earn about 1 million over the course of their lives, as compared to $580,000 for those with only a high school degree.
But this doesn’t tell the whole story.
Recent research shows:
- The average individual owes about $40,000 in student loans.
- 15% of people are still paying on undergrad loans, and 7% are still paying on graduate school loans.
- 53% of people say that their student loans impact the type of job or career they go into.
- 45 million Americans are collectively carrying $1.4 trillion in student loan debt, which impacts areas like disposable income and retirement savings.
"But back in my day..."
We’re not back in your day. We’re in the here and now, where the “moderate” college budget for an in-state public college for one full academic year averages around $38,000. How much has college tuition increased? In 2014, the average cost for four years of public college education was about $32,000. That’s a 375% (!) increase just in the last 10 years alone.
At this point, putting yourself through college without help or loans isn’t really a thing. In 2023, the average college graduate entered the workforce with over $39,000 in loans.
Student loan stress affects you
If you’re looking for people who can help you achieve your company goals, mission, and vision, you cannot afford to hire employees who are focused on financial stress rather than on what they can bring to the table.
- When staff members are constantly stressed about their financial situations, it leads to poor health outcomes and higher rates of absenteeism.
- When young talent can’t afford to take jobs with potential for growth or further their careers, this impacts your ability to recruit and retain talent.
- When candidates take a job just for the paycheck and aren’t truly invested, this leads to low engagement and a lack of motivation.
- When people are stuck in jobs they don’t want, it impacts employee morale, performance, and productivity.
- When employees are unhappy with their career situations, it leads to high turnover. They may start looking for other work, often on the clock.
Interestingly enough, it’s not only younger workers who have issues with student debt. The Department of Education found that 9 million Americans 50 or over have some form of student loan debt.
If the payments become too high and the loans go into default, paychecks or Social Security checks are garnished to make those payments. This means that employee life events, such as getting married, having kids, buying cars or houses, and retiring, are halted.
Give a helping hand
Today’s debt-ridden college students are tomorrow’s innovators, leaders, and employees—if they can afford to be. As an employer, you have the power to make a difference for your employees and your business. Here are a couple of ways you can do just that.
Support student scholarships and grants
You benefit from a highly educated workforce. Why not invest in keeping that talent pipeline open? Not only will you help encourage students to get degrees, but you’ll also help them graduate with less debt and more excitement about the future.
Provide student loan repayment benefits
This is a desired employee benefit, but only 34% of employers offered it in 2023. If you’re one of those employers who offer this benefit, you’ll have a big recruiting advantage.
You can make a difference
86% of employees would stay with their employer for at least five years if they offered assistance with student loan repayment. Why not lead the charge and be one of those employers? In the race for talent, this could give you a serious advantage and land you some awesome employees.
Content provided by Q4intelligence
Photo by alicephoto
