A recent survey, however, showed that 60 percent of Millennials (those now 19-35) don’t think they’ll be able to pay off their loans until they’re in their 40s.
Consider that for a moment: As soon as many Millennials graduate–literally as soon as they enter the work force and adult life–they have debt they believe they’ll carry for 20-plus years. It’s not minor debt, either–a recent report by Citizens Bank found that Millennial college grads spend close to one-fifth of their annual salaries on student loan repayment.
The fact is, this kind of debt impacts everything. It’s a major consideration when it comes to what kind of job to get, where to live and whether to even consider buying property (which feels like a pipe dream to many Millennials).
It also affects how long Millennials would be willing to stay at a company.
Millennials are notorious job hoppers, but a recent study found that those with student debt would stay with a company 36 percent longer if it offered student loan repayment assistance. In other words, a workplace that helps younger workers repay crushing student debt should expect to see higher rates of retention.
As a Millennial, I can attest to both study results. I’m fairly certain I’ll still be paying off my student loans into my 40s (barring some gigantic windfall), and I’d be far more likely to stay at a company that recognized the value of bringing that number down.
While it’s wonderful to offer matching for employees’ 401(k)s, offering student debt repayment assistance would say a lot about a company’s values. It would send the message that the company understands the actual burden of this on their younger employees–that this is one of the major things on their minds.
A close friend of mine puts close to $800 a month towards student loans, with no end in sight. Because she and I have never known things to be different, we can’t say whether we would have made different life choices without this as a factor. But it definitely affects my decisions about my present and future, and how I view my financial position as a whole.
Adding student loan repayment assistance to your benefits package would be a smart move if you’re trying to become (or stay) appealing to young professionals. While there’s a strong culture of matching retirement funds for employees, student loan repayment assistance is a newer idea. It makes a company stand out.
It would also do more than just boost Millennial employee retention by giving them a compelling reason to stick around. It would let them know that their issues matter, and that one of the biggest stressors in their lives would actually be eased by sticking with you.
It would demonstrate that you are the kind of organization that not only understands, but takes action on behalf of your people.
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