Student Loan Debt: Employer Help with Payoffs Are Great Incentives
Despite the staggering amounts of student loan debt owed today, now totaling over $1.6 trillion, students continue to take out loans for their education. Without such funding, most would not be able to afford to attend a college or university in the US. Youngers borrowers may be hit especially hard later upon finding out that delivering an average $400 payment to a loan servicer each month can be extremely difficult. This is especially true if they do not attain the level of income expected (or promised) right away.
We may also see our culture changing somewhat today as so many graduates are burdened financially and are unable to take some of the ‘normal’ steps expected in life. Millennials may be famously known for refusing to step into the shoes of previous generations, preferring to couch-surf or live at home as long as possible, but crushing student loans figure into many of these decisions.
Recent news shows that the student loan crisis spans individuals of all ages in the US:
“The data is clear — finding ways to effectively pay down student debt isn’t an isolated problem. It is impacting young and old, as well as workers in various industries,” said Asha Srikantiah, head of Fidelity Investments’ student debt program.
“Our research consistently shows that student debt can have a devastating impact on the financial wellness of many Americans, causing them to delay life events such as buying a home, getting married, having children, and saving for retirement. Part of the solution is knowing where you stand, which is why Fidelity offers resources to help employees and employers work together to craft a path to action.”
Fidelity’s data shows that while some employers are on board and very proactive about offering programs for paying off student loans, far too many employees are dipping into their 401K plans to pay for their overwhelming bills.
“By adopting a holistic approach, we are helping employers get in the trenches with employees to find ways to pay student debt off faster and hopefully, save money,” said Srikantiah. “What we have learned this past year is growing numbers of companies are increasingly aware that helping employees address the issue of student debt can help improve their overall financial wellness, which can in turn have a positive impact from a business perspective in a host of ways.”
While so many have lost their jobs altogether due to the coronavirus pandemic, businesses that can assist their employees in financial areas are the rarity.
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Posted in: Student Loan Debt