It’s estimated that today’s college students leave campus with nearly $40,000 in student debt. And its affecting more than just their own budgets.
“For employers, this is a major concern,” writes EdAssist’s Chris Duchesne in October’s Workspan magazine. And it’s one of the reasons loan repayment programs are catching on.
One issue is engagement. A Bureau of Labor Statistics report shows more than half of the indebted feel forced into higher-paying jobs just to afford payments. “Employees who are taking a job only for the pay likely aren’t very engaged,” writes Chris. “And employers are potentially missing out on the employees who are passionate about driving business forward.”
Why Pay Debt? Solve Multiple Challenges at Once
But uninspired employees, as Chris points out, are just one of the debt crisis’ effects on careers and workplaces; losing valuable people is another. In the tightening talent market, there’s the chance key employees will jump ship for pay over passion, another risk cited by the BLS. There’s also the rising need for college degrees; two thirds of jobs are expected to require them by 2020, yet heavily in-debt employees are unlikely to have the resources to pursue those gap-filling skills.
Finding New Ways to Attract Talent
What employers are realizing in loan-repayment programs, says Chris, is the ability to take on multiple challenges at once, appealing to new hires, keeping them on board, and giving people the financial wherewithal to pursue additional degrees. “They enhance an employee’s base compensation, provide a valuable attraction and retention tool, and engage employees and drive loyalty in ways that other programs do not.” For those needing more of a nudge, Chris pointed to an EdAssist study showing that nearly half of today’s employees enter the job market looking for loan assistance, indicating a need for an evolving approach to attract talent.
“We know many companies are confronting their own share of talent challenges,” writes Chris. “They are forcing employers to find new ways to get and keep the people they need.”
Read more of Chris’ article here, including case studies and a step-by-step guide for building an effective loan-repayment program.