Student Loan Assistance Provides Relief for Grads

With new degrees and diplomas, graduates are moving on to the next step in their lives: new careers. This is turning point in many lives, but often student loan debt makes the path ahead uncertain and nerve wracking instead of exciting.

The search for a career position is the next step for most grads, and for many of them the need to earn money to pay student loan debt is a fact of life. Student loan debt is the second leading form of debt in the United States, behind mortgage debt. Figures from the Federal Reserve Bank of New York show:

• National Student Loan Debt – $1,407,200,000,000 ($1.41 trillion)
• Overall Number of Student Loan Borrowers – 44,179,100 (about 70% of college students)
• Student Loan Default Rate – 10.7%
• Student Loan Delinquency Rate – 5.41%
• Average Debt per Student Borrower – $27,857

Student Loan Assistance gives Relief

This debt reality and other financial worries are on the minds of most graduates. A recent Barnes and Noble college survey of students graduating this spring and summer revealed what they are concerned about: 68 percent list earning enough money as their top concern, and about half were concerned about student loans. Salary was the most important factor in a job search and about 60 percent were afraid that their salary would not meet the goal they had set.

Recent grads on the job hunt aren’t the only ones concerned about finances. The Barnes and Noble survey showed that nontraditional students have financial concerns also. Eighty-nine percent of them believe their education is moderately to highly valuable, but only 15 percent of them feel financially secure. This can affect everything from where they go to school, their ability to pay for textbooks and materials, and how much they must borrow to finance their education.

Employers can promote the long-term and short-term financial well-being of their employees who are going to school as well as those who carry student loan debt with a tuition assistance program that includes student loan assistance. Student Loan Hero data shows that “out of workers who have student loan debt, only about half are contributing to a retirement savings account such as a 401(k) or IRA. It’s understandable, considering they probably can’t afford to save for retirement until that student debt is paid off.”

According to both SHRM and Edcor surveys about 4 percent of companies offer some type of student loan assistance, and that number is expected to grow significantly in the next few years. Willis Towers Watson predicts that by next year 26 percent of companies will offer this benefit. This may become one of the most popular benefits for employees; 44,000,000 workers with student loan debt means that about one in three people in the American workforce have student loan debt. Giving assistance to these employees is good business.

Creating a workplace that eases employees’ financial stress and enhances their financial well-being creates a workplace that maximizes employee engagement. Tuition assistance plans that meet the needs of employees who are students and those who have recently graduated will create maximum conditions for both employees and employers.