Employee Student Loan Debt: 10 Things You Need To Know, Part One

Employee Student Loan Debt: 10 Things You Need To Know, Part One

Employee student loan debt: 10 things you need to know, part one. What employers need to know about how student loan debt affects their employees.

The U.S. has a student loan debt crisis. And employers are paying the price.

Over 44 million Americans are carrying a total of $1.48 trillion in student loans. Forty percent of adults under 30 and 16 percent of adults overall live with outstanding student loan debt, according to the federal reserve’s 2017 Survey of Household Economics and Decisionmaking.

Chances are, your employees are among those affected. Employees facing significant student loan debt are more likely to defer saving for retirement, buying a home, getting married and having children. They’re also more likely to seek out a second full-time or part-time job to cover their expenses. As a result, their concentration, productivity and overall physical health suffers from the accumulated financial stress.

The financial cost of higher education is only increasing with time, matriculating well-educated, inexperienced and deeply indebted graduates into the workforce. In this two-part series, we offer you 10 things you should know about how student loan debt affects your employees:

1. Student loan debt is the second-biggest type of personal debt in the United States.

Student loans are one of the largest contributors to overall household debt among Americans, second only to mortgage debt. While the overwhelming majority of those loans are federally held, there has been an increase in borrowing from private lenders. Private student loans are ineligible for loan forgiveness programs or income-based repayment programs, complicating repayment plans and decisions on where (and how) to seek debt relief.

2. The amount of student loan debt Americans owe is getting worse with time.

In February of 2017, the Federal Reserve Bank of New York announced that student loan debt had grown for the 18th consecutive year and that the amount borrowed doubled in the last eight years, reaching a total more than $1.48 trillion owed. Not only are more students are taking loans for higher amounts but they are paying them back at a slower pace than in the past.

3. Student loan debt is affecting your workforce.

Sixty-eight percent of all new college graduates have student debt. Even if your employees don’t have significant amounts of student debt themselves (which is a relative assessment), they’re likely to have friends or relatives who do. Student loan repayment plans average at $351 per month and that number isn’t going down any time soon. It’s important to note that the average annual US salary for 24 to 35 year olds is $39,000. Student loan repayments are killing your employees’ financial wellness and are averaging nearly 10 percent of their income, replacing retirement contributions, mortgage payments and possibly even monthly health insurance costs.

4. The average debt per student has risen to nearly $30,000.

One fifth of graduated student loan recipients aged 25-39 take on extra employment in order to make payments on their student loan debt. Employees working a second job can mean lower productivity while at work and a difficulty in maintaining a reliable work schedule. Overworked employees are also more likely to experience fatigue and burnout from the added stress of juggling multiple jobs – as well as the stress from their student loan debt.

5. The average interest rate per student loan is approximately 5 percent, meaning your employees actually end up paying back significantly more than what they borrowed.

The interest rate paid by a loan recipient is dependent upon which type of loan and repayment plan that they have been given. For federal loans, the current amount for direct subsidized and unsubsidized (the type provided to undergraduates) loans is 4.45 percent. At the graduate level, the interest rate is 6 percent. For people 60 and over who take out loans to help younger relatives, the rate is 7 percent. Private student loans carry interest rates averaging 9 to 12 percent. Depending on the repayment or consolidation plans, these high interest rates can quickly inflate the initial amount of the loan and add tens of thousands of dollars to what an individual is trying to repay. And, interest and late fees are paid before any monthly payments are applied to the original loan amount.

And there’s even more you need to know. To learn more about student loan debt and your employees, be sure to read Part Two of this article here.

More on Student Loans and Financial Stress

Employee Student Loan Debt: 10 Things You Need To Know, Part One

Employee Student Loan Debt: 10 Things You Need To Know, Part Two

Student Debt Financial Stress Haunts Millennials and Older Workers, Too

What Tops Financial Stress for Employees?

The Student Debt Crisis is Growing and Affecting Your Workforce. What Can You Do?

Financial Wellness Programs Your Employees Need

Financial Wellness Programs Your Employees Need

In this week’s Best Money Moves roundup, we take a look at news stories and new research studies that may impact employee benefits and HR issues. We hope you find this news roundup helpful, and we’d love your feedback.

Are you providing the financial wellness programs that your employees need?

Financial wellness programs often go overlooked by Human Resources departments because employers don’t always understand the tangible benefits of reducing employee financial stress. If you know that your team members are carrying high levels of financial stress, don’t wait any longer to create a plan – and implement a solution.

Financial stress can put a major strain on your employees’ physical and emotional wellbeing. New studies show that 7 of the top 10 health problems afflicting Americans are exacerbated by financial stress.

Financial wellness starts in the workplace. The majority of employees spend an average of 12 hours per month worrying about their personal finances while at work and they’re waiting for their employer to help them with financial education and literacy. Having resources, tools and an understanding of how to tackle their financial stress will overwhelmingly bring down their stress levels. Addressing this staggering lack of financial literacy will not only raise your employees’ financial wellness – it will increase their overall health, productivity in the workplace, their commitment to your company and will lower your company’s turnover rates.

The top five reasons why financial wellness matters.

Tax reform! It’s incredibly confusing and is complicating filing processes for individuals, families, small businesses and corporations, alike. The new tax law will largely go into effect when you file your 2018 taxes (in April, 2019). But, there are still important and new things you need to know for your 2017 tax filing – this should help.

Tax law changes and what you need to know.

Are you providing employer savings plans? Providing your employees access to retirement savings plans allows them to strengthen their long term financial outlook. It also benefits your company’s bottom line – by raising their personal levels of financial literacy and wellness, it raises productivity and lowers turnover.

Simple ways you can help your employees save.

Are you on top of the 15 biggest HR challenges for 2018? With a constantly evolving workforce and the need to offer access to employee financial wellness, well being and mental health, employers have a serious responsibility to step up and provide the best possible work environment that they can.

The 15 biggest trends to look out for this year.

The new tax law: beneficial impacts for your company. Thanks to the Tax Cuts and Jobs Act, corporate tax rates are dropping from 35 percent to 21 percent. Companies are already beginning to see a windfall of extra cash at their fingertips – but how will that money be spent?

Companies are saving, big time.

This is America’s number one financial worry in 2018. Between having little to no savings, quickly climbing debt and an unclear vision for future retirement, there’s plenty to worry about. Seventy three American adults say that their most pressing financial concern is improving their credit score.

Here are steps you can take to improve that credit.

Do you have $1,000 to cover an emergency? Nearly 69 percent of Americans don’t. And, digging into your retirement savings to cover the costs of an emergency is not ideal, to say the least. Without an emergency fund, you take from your savings, you let problems fester and you add to your credit card debt.

Read about how one family planned and paid off their debt – ahead of schedule.

Believe it or not, it’s still only the beginning of 2018! You are still in the prime adjustment period between last year’s operations and this year’s best practices. If  you haven’t already, now is the time to reflect on 2017 and make the necessary changes to ensure your company is compliant with

2018’s HR best practices and latest employment laws.

Have something to add? Email info@bestmoneymoves.com.

Looking to Improve Employee Retention? Try This One Thing

Looking to Improve Employee Retention? Try This One Thing

In this week’s Best Money Moves roundup, we take a look at news stories and new research studies that may impact employee benefits and HR issues. We hope you find this news roundup helpful, and we’d love your feedback.

Are you looking to improve employee retention and overall employee and workforce wellbeing? Try identifying subtle gender inequities in your workforce.

Nearly 50 percent of women in science, technology, engineering or math (STEM) industries have experienced gender discrimination at work, according to a nationally representative Pew Research Center survey with an oversample of people working in STEM jobs. These findings come amid heightened public debate about underrepresentation and treatment of women – as well as racial and ethnic minorities – in the fast-growing technology industry and decades of concern about how best to promote diversity and inclusion in the STEM workforce.

In the workplace, perceived inequities (being denied promotions, earning less than their male counterparts, being treated as though they are incompetent, receiving less support from senior leaders), are especially common among women in STEM fields who work mostly with men. Women in this field are much more likely to have experienced discrimination at work, which reduces overall employee and workforce wellbeing.

The study found that discrimination and sexual harassment are seen as more frequent, and gender is perceived as more of an impediment than an advantage to career success in STEM industries. Not to mention what it does for your employee retention rates.

Workplace equity in STEM fields – what is your HR team doing about it?

Financial literacy in schools helps get students on the road to financial wellness. Millennials in large numbers complain that they have financial stress and are woefully unprepared for the financial realities of life. Education secretary Betsy DeVos formally declared that financial literacy is #4 out of her department’s top 11 priorities. If financial literacy standards are adopted, it should help your future employee feel less financial stress. (Watch for Best Money Moves’ latest white paper on overall college students’ financial stress, to be released later this quarter.) Financial wellness  is high priority.

Financial resolutions can be made all year long! Money is always top of the mind when New Years comes along, but you don’t have to wait another 12 months to begin that process towards your financial goals. Studies show that people with a financial plan are three times more likely to be confident in their retirement goals than those who don’t.   New Year’s Financial Resolutions.

Is financial stress making your employees sick? Over 500 employers were asked to select the top medical conditions that keep company healthcare costs high. Seven of the top ten health problems listed are exacerbated by financial stress. We’ve collected the top health issues caused by financial stress and different ways you can help.  Help your employees reduce financial stress.

Is your small business ready for 2018? Tax reform, ACA, paid leave, I-9 scrutiny… there are so many regulatory changes this year it’s hard to keep track. But, it’s important that you and your small business are up to date and knowledgeable on all updates, changes and possible issues that are waiting in the wings. Navigate the small business regulatory landscape with confidence.

Will medical marijuana be covered in your benefits plan? As openness to alternative medication grows, so does the possibility of it being prescribed to your employees. Company safety concerns and compliance issues need to be addressed – and internal regulations created – before laws change, in order for you to be prepared. Medical marijuana – are you ready for it?

Does your company offer healthcare coverage? After removing the requirement for individuals to have health insurance, Republicans in Congress are taking aim at the Affordable Care Act’s  mandate that employers offer coverage to their employees. Here’s what you need to know.

Did you know? Filling your tax returns ASAP can help prevent identity theft. A common form of identity theft involves criminals filing phony returns using your social security number. But, the IRS can only accept one tax return for each individual.  File your taxes before the criminals do it first.

Have something to add? Email info@bestmoneymoves.com.

Forget a Raise, Your Employees Want Better Benefits!

Forget a Raise, Your Employees Want Better Benefits!

In this week’s Best Money Moves roundup, we take a look at news stories and new research studies that may impact employee benefits and HR issues. We hope you find this news roundup helpful, and we’d love your feedback.

According to a new survey from the American Benefits Council, American workers would choose more generous benefits and less pay, by a two-to-one margin. Essentially, most employees would rather be handed a standard set of benefits chosen by their employer than be given the money and responsibility for choosing themselves.

On the surface, this makes no sense. It even stumps corporate benefits executives, who as a group believe employees would prefer higher pay to more generous benefits, according to the survey. After all, designing your own benefits would allow you to, say, maximize child-care contributions in your 30s and 40s and favor something like a flexible work schedule in your 60s.

Why would anyone prefer a cookie-cutter benefits package over one that is tailored to their needs and has identical economic value? In part, at least, this shows that the average American employee lacks the confidence and the knowledge to make these types of educated money decisions.

That speaks to a lack of financial education in schools and the workplace. We are turning out generation after generation of individuals who are afraid or unable to make important and personal decisions that affect their financial future.

Your employees lack financial education. Here’s how you can help.

This past holiday season, Best Money Moves’ founder and CEO Ilyce Glink had the honor of being highlighted for her success as a businesswoman and entrepreneur by colleague Liz Handlin, the CEO of Ultimate Resumes. Learn how and why Glink developed Best Money Moves, why it’s unique among its peers and how Best Money Moves will bring your own  company greater success in 2018.

How to: Freelance Writer to Software Executive in 3 Easy Decades.

Financial confidence is key to overall financial wellness. This finding is changing the financial education landscape at many companies and helping people make educated decisions about their money. Financial confidence directly correlates with financial wellbeing – here’s what you need to know as you set a course for your employees to manage their money. Financial confidence inside.

Hiring in 2018? Of course you are! The new year is starting off in a great economy with a low unemployment rate. However, the hiring process seems to be more difficult than ever. Hiring practice laws vary state-to-state and larger companies are increasing automation practices, while company ethical reviews are increasing in importance. 7 things to consider when hiring in 2018.

43 Million Americans live with unpaid medical debt. This is causing major damage to credit reports and inevitably, causing serious financial stress at home and at work. The 3 major US credit bureaus have launched a new protocol: a 6 month grace period before debt knocks credit reports. Here’s how you can help protect your employees’ credit – and maybe your own, as well.

Job Candidates are Getting Choosier. With the unemployment rate at an 18-year low and jobseeker confidence near an all-time high, HR and talent acquisition leaders are finding themselves having to hustle to attract qualified candidates. What kind of employees do you really want?

Employment and Compliance laws are changing. Legal protections for employees are expanding at the state level and shrinking under federal law. The Department of Labor (DOL) will be much more “employer friendly,” with state lawmakers picking up slack. 2018’s new employment laws.

Tax Reform – Get ready to relearn your onboarding process. Coming sometime in January 2018, the IRS will issue new paycheck withholding tables as well as revised W-4 forms. As of now, there is a lot of speculation as to exactly how this will affect HR. 2018 income tax rates and brackets.

These top 10 tech trends will create a competitive advantage for your company. Are you ready for it? Everything from AI (Artificial Intelligence) to bots. Predictive software and apps that manage every aspect of your life are becoming more mainstream. These tools will not only dominate your life at home, they’ll dominate your work life as well.  Top HR tech trends for 2018.

Have something to add? Email info@bestmoneymoves.com.

10​ ​Simple​ ​Ways​ ​to​ ​Improve​ ​Employee​ ​Retention​ ​in​ ​2018

10​ ​Simple​ ​Ways​ ​to​ ​Improve​ ​Employee​ ​Retention​ ​in​ ​2018

New Year’s resolutions often prioritize the old adage “out with the old and in with the new,” so it may feel odd to focus on employee retention this year. But, knowing how to keep the right people leads to better workplace morale, higher economic growth and can even enhance future recruitment efforts.

Here are some ways to make employee retention your number one resolution in 2018.

1. Reevaluate company culture.
Be honest about what you want your company’s culture to be. If your workplace has one too many dysfunctional teams, redundant projects or a general sense of low morale, it may be time to restructure. With input from your employees, you’ll have access to better understand the natural ebbs and flows of day-to-day activities. But, it’s your job to keep an eye on your company’s vision and be aware of how you, your employees and your company are in line with it.

2. Create a stable environment in times of change.
You can’t anticipate every change that will happen in your company but you can choose to be the face of collected calm and leadership during transition. Let your employees know their jobs are secure during times of flux by sharing your progress on the road to stabilization. Encourage open communication from your employees and provide transparency back to them. Acknowledge specific challenges they may face and provide relevant resources to help them overcome potential setbacks. A sense of stability will come from the top and it’s the job of company leadership to provide this.

3. Revitalize your hiring strategy.
In order to cut down on turnover, the first step is to ensure that the individuals you’re hiring actually want to be there. Front-load information about your company’s culture during the interview process. If you need team members to be available and on call late into the night, your new hires should know to expect a 10:00 pm phone call. Have your team keep a list of their own daily tasks (also a great way for you to better manage them) and have outgoing employees write descriptions for their empty positions – allowing for more detailed expectations for new staff members. Offering employee referral benefits is another great way to revitalize your hiring strategy.

4. Improve your training processes.
New employees should receive training conducted by experts in each department. You can either use in-house talent or hire an outside professional to lead on-the-job learning. This should introduce employees to new information, allow them to demonstrate their skills and knowledge and give them a tangible method to monitor their own improvement. Many successful training programs offer cloud-based components providing employees access to additional materials, allowing them to invest in self-directed learning.

5. Create room to grow.
Employees won’t stay with your company if they can’t imagine their future there. New hires should understand their potential for advancement. Meet annually to discuss their growth, encourage training programs and remain flexible to new challenges they might want to take on. Promote from within the company (rather than externally hiring for leadership positions) – it’s a great way display that your employees have a path forward and you want to help lead them there.

6. Welcome employee feedback.
Regular surveys are a great way to gauge what employees need in order to be successful – and to learn where you can step up, as an employer. Exit interviews are equally important. Don’t ask for feedback just for show. Let your employees know their problems are heard and that you want to resolve them by making changes based on their recommendations.

7. Build trust between employees and managers.
Management is often an employee’s first point of contact when they are experiencing a problem. Encourage an open door policy to ensure that employees come to management when issues first arise, not when they’ve reached a point-of-no-return. Management should be transparent with their expectations of all employees and offer positive reinforcement and support.

8. Be more flexible.
Work-life balance is crucial for managing stress, promoting creativity and generating enthusiasm for work. Giving employees the option to telecommute, offering a flexible schedule and allowing for “personal days” can show employees you are invested in their well-being, not just their bottom line.

9. Buff up your benefits package.
Offer benefits that your employees want – as well as what they need. Currently, the most requested benefits are: better healthcare coverage, flexible hours, work-from-home options, mental and physical health perks (like “personal” days, yoga classes and gym memberships), tuition assistance programs and making financial wellness education a priority. Employees are looking for benefits that make their lives outside (and inside) the office more enjoyable. When employees are more secure in their personal lives, they are more likely to feel satisfied in their work.

10. Invest in employee wellbeing.
Employees will stay at a company longer when they feel that they’re being challenged and respected. Benefits packages providing employees with avenues for self-improvement such as: financial management tools, on-the-job training programs and tuition reimbursement – can be even more attractive than salary increases. No one likes to feel stagnant in their career. Providing opportunities for growth inside and outside of work is essential for your employees, and their retention.