The Student Loan Ranger has often pointed out that student debt is a multigenerational issue affecting Americans of all ages.
But while it’s true that the number of older Americans with student loans is rapidly rising, there’s no denying that millennials bear the largest student loan burden — both in numbers of actual borrowers and total amounts — of any age group: Roughly 65 percent of all outstanding higher education debt is held by people younger than 40 years old, according to New York Federal Reserve Bank data.
The result? The kids aren’t alright, it seems.
[Discover 10 steps to develop a student loan repayment plan.]
A recent poll by the Student Loan Ranger’s organization, American Student Assistance, of 502 workers between 22 and 33 years old shows that rising student loan debt is hurting their focus at work, their well-being and their retirement planning, as well as delaying their pursuit of further higher education.
More than half said they worry either all the time or often about repaying their student debt. Meanwhile, 40 percent report that worrying about their student loans has affected their health, and 55 percent would like to go to graduate school but can’t take on any additional student loans.
The study also revealed that student debt may be laying the groundwork for less future financial security for millennials. More than 3 out of 5 young workers say their priority is paying off student loans and not contributing to a 401(k) or other retirement plan.
[Check out careers that offer student loan forgiveness.]
Millennials in the workforce feel unsupported when it comes to their college debt, with 63 percent reporting they don’t have anyone to turn to for help with regard to paying off their student loans. So it comes as no surprise that nearly 90 percent of these young employees say they would commit to a job for five years in return for help with their student loans, while nearly 80 percent would take advantage of free access to a student debt loan counselor provided by their employer.
However, the research revealed a disconnect between employers and young employees. In addition to polling young workers, the survey also sampled 451 human resource managers at companies with at least 100 employees.
Seventy-five percent said their company does not offer any guidance or assistance regarding student loans. Moreover, the Society for Human Resource Management has found that only about 4 percent of all employers offer any kind of student loan benefit.
That could change if Congress passes the Employer Participation Student Loan Assistance Act, which would allow employers to contribute up to $5,250 annually toward employees’ student loans tax free. While more employers have stepped up to the plate on this issue over the last two years, the tax incentive could really tip the scales in favor of the benefit being offered more widely.
[Find out why student loan repayment may be the newest employee benefit.]
It’s unclear whether Congress will act to encourage employer participation in student loan repayment. In the meantime, workers of any age who feel stressed out about their college debt can talk to their employer about the possibility of a student loan benefit.
This remains an emerging workplace trend, and many human resource professionals may not be familiar with it yet. You may want to use the example of tuition assistance, a much more common benefit, as a reference point for a conversation with your HR department.
Employees may also want to check into any financial wellness counseling that their employer provides. The rules and payment plans around student debt are very different than those for other types of consumer debt, so general financial counseling won’t always be able to answer specific student loan questions.
But worries over student debt don’t always occur in a vacuum. Other financial problems often contribute to overall stress levels, so speaking to someone who can help you master financial basics like budgeting, saving and credit card use will be beneficial.
Last, remember to talk to your student loan holder about any available options to make your student debt load more manageable. Or if you prefer a neutral source of information, check out the Consumer Financial Protection Bureau’s resources for students.
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Young Workers Turn to Employers for Student Loan Debt Solutions originally appeared on usnews.com
