I recently fell upon an article from 2017 that discussed the weight of student loans on young workers. My conclusion? Student loans suck and businesses can use this to their advantage. While the sample size was small (approximately 500 participants), I believe the data from the article to be pretty close to accurate. Here are my faves:
- 56% of young workers surveyed say that they worry about their student loans either all the time or often.
- 86% stated that they would commit 5 years to an employer if they helped with their student loans.
- 75% of HR professionals stated that their organization does not have a program to help workers with student loan repayment.
- There is a disconnect– digging deeper into the survey, you see that while one-fourth of those w/student loan debt worry about their debt all of the time, only one-tenth of HR pros think workers worry about the debt all of the time.
Let’s consider turning this story into a happy ending. If businesses make some tweaks to their benefits, they may be able to attract young talent much better than their competition.
Spend Some Money
If your organization has the funds, it would benefit you to offer student loan forgiveness programs to young workers. Especially if you want to attract talent. There are a few ways you can do this.
- Offer a signing bonus that would go toward student loans.
- Write your offer letter to state that after X years of service, you will pay Y dollars towards student loans.
- Encourage your employees to pay off their debt instead of blowing their money on fancy clothes (I’m so guilty). Offer incentives like vacation time or gift certificates with proof of student loan payoffs.
- Older generations don’t have as much of a burden from student loans, so usually, our parents can’t offer as much guidance. Offer a perk like a financial advisor to assist employees with better planning.
Reallocate Your Budget
Want to get really creative? Organizations are constantly finding cool ways to attract talent and reward current employees. Don’t get left in the dust. Instead of having to find new funding strategies for these types of perks, you may be able to reallocate your benefits budget.
- I found a product from Fidelity that allows you to contribute to your employees’ student debt payoffs. Consider offering the option of either 401k matching or student debt matching.
- Personally, tuition assistance never attracted me, because I have already received all the education that I want/need. Instead, let workers choose between student loan forgiveness or tuition assistance.
- Snag employees right out of high school or associate college programs. Pay them less money up front with the understanding that you will give them tuition assistance, and after graduation, make a promise to offer them a pay increase.
- Many organizations are now paying their interns. Offer to pay them a little less than the competition in return for a nice stipend at the end that would go toward student loans or tuition.
- I recently read that some organizations are allowing their employees to trade unused PTO for student loan assistance. Definitely something to look into!
When I graduated from high school, I was led to believe that a college education was not an option. You could not get a good job without one. Soon after that, students were pushed to get Master’s degrees. We were told that a Master’s was the new Bachelor’s. In the end, we are finding none of this to be true, but we can’t turn back the clock. You really can get a good job without a college education, however, this push will be a slow one.
For now, you need talent, and young workers need debt help. Use the fact that student loans suck to your advantage and turn it into a talent attraction strateg.