According to data from the National Center for Education Statistics, colleges and universities in the U.S. expect to award more than 980,000 associate degrees, and nearly 2 million bachelor's degrees to graduates by the end of the 2019-2020 academic year. What's more, NCES forecasts that there will be 820,000 master's degree holders and 184,000 graduates awarded with doctorate degrees by the end of 2020.
All these new graduates entering the workforce mean recruiters and hiring managers will have their work cut out for them when it comes to attracting and retaining talented candidates. One of the best ways to encourage the attention of recent grads and support the young workforce is by offering student loan aid as part of the employee benefits package.
Student loan debt is on the rise
As more students pursue higher education opportunities, the level of debt among these individuals as a whole is sharply rising.
Overall, 69% of students that graduated as members of the class of 2018 took out loans to support their school costs, according to Student Loan Hero and Lending Tree. As a result, each of these graduates has an average of $29,800 in debt hanging over their heads, with responsibilities to pay back both private and federal loan debt.
In fact, there are approximately 45 million people with student loan debt totaling more than $1.56 trillion. That number is $521 billion more than total credit card debt among American consumers.
"45 million people have student loan debt totaling more than $1.56 trillion."
Graduating with a debt amount in the thousands can be particularly stressful for former college students, and even individuals who landed a job or career in their field shortly after graduating are still concerned with repayment.
Taking all this into account, it's no surprise that student loan aid and repayment benefits have been named among the most-desired benefits for young Americans.
Young professionals seek loan aid over other benefits
In fact, according to data from the Society of Human Resource Management, workers in certain industries are increasingly demanding loan assistance as part of their employment package.
SHRM contributor Stephen Miller noted that student loan repayment was a top benefit choice for 41% of all young adult job seekers, following only paid time off (45%) and health insurance (54%) as a leading benefit selection.
"Tellingly, respondents with college debt most wanted any new benefit dollars from their employer to go toward helping them repay their loans," Miller wrote.
In some cases, student loan repayment was chosen ahead of advantages including higher salaries, and 401(k) contribution. In the minds of young workers with considerable student loan debt, it simply makes more sense to devote dollars to their existing loans before planning for their far-off future.
Why HR should consider adding this to the benefits package
Even if your company only has a small percentage of young adults within its workforce, there are a few key reasons you should consider adding loan aid to your benefits package:
- Older workers are attending classes as well: It's worth pointing out that nowadays, it's not just high school graduates that are attending or considering higher education. Even older individuals that already have careers in their chosen field are taking part in college or university programs to expand their skills and boost available opportunities. In this way, supporting loan aid as part of your benefits package isn't just a perk for your younger workforce – other staff members will likely appreciate and may take advantage of this benefit as well.
- Aid can eliminate workforce stress: EBN reported that more than 30% of employees admit that financial concerns impact their performance at work, and 74% people with student loan debt stress about it daily, and spend time on this concern while at work. All this can seriously impact worker productivity, so even helping out with a small percentage of employees' student debt can represent a huge weight lifted off their shoulders.
- Repayment can be flexible: Because this benefit is so new, there's no hard and fast standards for offering it as part of your benefits package. As EBN contributor Alyssa Schaefer pointed out, this means the level of student loan aid you support can be flexible according to your business's needs.
"As an employer, you have options to create a student loan program that works for your team's needs and the company's bottom line," Schaefer wrote.
To find out more about adjusting and managing your benefits offerings, connect with our experts at Triton Benefits & HR Solutions today.