Millennials Clamoring for Student Loan Repayment Benefit from Employers
Employers looking to set themselves apart when it comes to recruiting and retaining millennial talent should consider setting up a formal program to help them repay their student loans. That’s the finding of a recent study from American Student Assistance, which surveyed 52 workers between the ages of 22 and 33, as well as 541 human resources managers at companies with more than 100 workers.
What they found: Overwhelming demand by stressed out recent college graduates for help from employers with student debt.
- 86 percent of younger workers say they would commit to stay with an employer for five years if that employer offered assistance with paying off student loans.
- 93 percent of them say they would take advantage of a sign-on bonus targeted at paying back student loans.
- 92 percent report they would take advantage of a student loan repayment matching contribution program, similar to 401(k) matching program.
- 79 percent say they would take advantage of employer-provided, free access to student loan counseling.
What’s driving the demand? Severe stress over the overwhelming burden of college debt. The average college graduate with student loans graduates with over $30,000 in debt owed to education lenders – with some of them graduating owing six figures.
It’s having an impact on their mental and physical health:
56 percent “often” worry about paying of their student loan. 26 percent of them report they worry about their student loan debt “all the time, and 40 percent say worrying about student loans has damaged their health.
The ASA’s researchers found that student loans were the greatest stressor in their financial life, with 31 percent reporting they worry most about their student loans. That was significantly higher than the percentage reporting they worry most about credit card debt (26 percent), and far greater than the percentage of Millennial workers who reported worrying most about their mortgages and car loans.
Existing student loan debt is also holding back career and professional development. More than half of those surveyed say they would like to go to graduate school but are unable to because they cannot take on any more student loans.
“Young workers feel highly stressed out as a result of the burden of student debt and that debt clearly impacts their health and productivity in the workplace,” said Kevin Fudge, director of consumer advocacy and ombudsman at ASA. “Employers should realize that in order to retain the brightest young talent and demonstrate their commitment to employee well-being, they need to provide concrete and straightforward solutions to help alleviate this burden.”
More important than 401(k)s
ASA’s study highlights an important generational difference between Millennials and older workers. A strong majority – 59 percent, say that paying off their student loans is a higher financial priority than contributing money to their employer’s 401(k) – even though most employers provide a matching contribution to their defined contribution pension plans.
Buttressing that finding, 76 percent of respondents say they would take advantage of student loan repayment assistance, while only 60 percent say they would participate or are participating in their employer’s 401(k) match. But only 16 percent of employers surveyed actually provide any kind of tuition assistance program.
The ASA’s full study is available here.