How bad is the student loan crisis? Student loan assistance is becoming a popular employee benefit for employers who want to help workers reduce financial stress from student loan debt.
Over 70 percent of Millennials say they’ve delayed decisions like buying a home or having children because of their student loan debt, according to a recent survey by Bankrate.
“There’s a huge toll being taken on individuals and the U.S. economy from the growing burden of student loan debt,” said Bankrate’s Senior Economic Analyst Mark Hamrick. “For the huge slice of the American population with debt, it is necessary to juggle competing goals including saving for emergencies and retirement as well as major life decisions.”
Student Loan Debt Regret
Nearly 80 percent of Millennials would have approached their college finances differently in hindsight. More than half of Millennials would have applied for more scholarships than they did. Others would have attended a cheaper university, opted for community college or trade school, or majored in a different field.
“Many families are now striking out to investigate college campuses as they begin studies this fall,” said Hamrick. “For those prospective students and their families, many of who will help them to pay for their secondary education, we’d urge them to investigate all possible options for financial aid including scholarships to limit their borrowing.” He goes on to suggest: “Their options also include attending a lower-cost school such as those in-state as well as more economical trade schools and community colleges.”
Families can help children approaching college make better decisions about student loans now, but what about the Americans splitting the $1.5 trillion in student loan debt the U.S. has already generated who aren’t meeting milestones or saving for retirement?
Employee Student Loan Assistance
Employers are coming up with solutions to help employees pay down student loan debt and get back on track with saving for retirement. Some companies are allowing workers to transfer up to five days of paid time off for payments against student loan debt. Other programs offer student loan refinancing or allow employers to match employee 401(k) contributions with student loan repayments.
Lawmakers are working to expand existing legislation that allows companies to offer up to $5,250 in tax-free tuition reimbursements to include $5,250 in tax-free student debt relief for workers in an attempt to further motivate employers to offer student loan assistance benefits.
Student loan debt assistance is still a new benefits offering, but it’s developing rapidly to meet the need to address the $1.5 trillion issue that’s stressing Americans out and keeping them from financial security.