The sta­tis­tics are startling:

  • The total bur­den of stu­dent debt in the Unit­ed States is $1.4 trillion.
  • In 2017 the medi­an mil­len­ni­al wage was $43,000.
  • In the same year, the medi­an mil­len­ni­al debt was $37,000.
  • 59% of employ­ees 22 to 44 have stu­dent debt.

Debt is the #1 finan­cial chal­lenge to all Amer­i­cans, and by a wide mar­gin. This lack of fis­cal health has a neg­a­tive effect on both men­tal and phys­i­cal health, both of which affect employ­ee per­for­mance and motivation.

In a time of reduced unem­ploy­ment, the bat­tle for tal­ent and its reten­tion is increas­ing. How do we get qual­i­ty employ­ees? What can we offer to keep them? If they stay, how can we help max­i­mize appre­ci­a­tion and thus loy­al­ty? The sim­ple answer is to offer a mean­ing­ful com­pen­sa­tion and ben­e­fits pack­age. The more rel­e­vant, and com­plex, answer is to address spe­cif­ic employ­ee needs and thus cre­ate a more mean­ing­ful employ­ee experience.

Med­ical and retire­ment may be a giv­en, but how val­ued are those ben­e­fits if debt pre­vents par­tic­i­pa­tion or fore­stalls ful­fill­ing med­ical needs? Do employ­ees even know the risks of refusal? What will they deny them­selves lat­er by not attend­ing to their long term wellbeing?

Greater atten­tion is thus being paid to employ­ee edu­ca­tion in the basics of finance, while offer­ing prod­ucts, tools, and ser­vices under the rubric of “finan­cial well­ness.” One of the key com­po­nents of such a pro­gram is instruc­tion in debt man­age­ment. New offer­ings in the stu­dent loan sec­tor allow employ­ers to go even further.

Pay­ing off debt is expen­sive, with the “load” exceed­ing the inter­est earned on sav­ings and poten­tial­ly the tax and accu­mu­la­tion val­ue of a 401k or oth­er retire­ment instru­ments Thus, find­ing a way to alle­vi­ate the stress of a finan­cial bur­den paves the way to take advan­tage of a sig­nif­i­cant sav­ings opportunity.

A bur­geon­ing cot­tage indus­try has devel­oped to help those with stu­dent loans, pri­mar­i­ly through the chan­nel of employ­er spon­sor­ship. These ser­vices offer:

  • Employ­er pay­ments to employ­ees to reduce loan balances

(exam­ple – PwC gives employ­ees $100 per month for up to 72 months).

  • Access to lenders who will refi­nance the loan.
  • Edu­ca­tion and coun­sel­ing, not just on exist­ing debt but how to finance a child’s col­lege edu­ca­tion (e.g. using 529 plans).

For a mod­est fee, these com­pa­nies expand the resources for employ­ees, stream­line ser­vices, help reduce debt, and also cre­ate a sim­pli­fied method of repay­ment through pay­roll deduction.

Var­i­ous stud­ies have cited:

  • 61% of employ­ers polled said they believe stu­dent loan wor­ries have ham­pered retire­ment plan participation.
  • 81% of mil­len­ni­als, and 65% of those over 50, want their com­pa­ny to offer stu­dent loan tools and resources.
  • A sim­i­lar per­cent­age of both pop­u­la­tions would be more inclined to accept employ­ment with a com­pa­ny that offered stu­dent loan tools – or stay with a com­pa­ny if they received stu­dent loan benefits.

Grant­ed, spe­cif­ic stud­ies are skewed to favor the spon­sor­ing stu­dent loan ser­vices, but there is lit­tle doubt that stu­dent loans place finan­cial, and thus men­tal and emo­tion­al, stress on employ­ees. Just ask them – and then ask how you can help. The more you can offer, the more appre­cia­tive they will be. Recog­ni­tion and appre­ci­a­tion of a benefit’s val­ue is the cor­ner­stone of a suc­cess­ful com­pen­sa­tion and ben­e­fits pro­gram, after all, so now is a good time to see how you can expand yours in a mean­ing­ful way.