Millennial employees are increasingly looking to their employers for help managing their student loan debt, either through providing financial contributions to their debt or offering student debt management tools, according to a new survey by IonTuition.
The survey included the responses of 2,712 currently employed adults who borrowed student loans. The vast majority – 71.9 percent – were born in 1980 or after, therefore qualifying as millennials.
Just over 65 percent of those surveyed were college graduates, while 20 percent were currently enrolled in college and 12.9 percent said they were enrolled but have not taken classes in over a year. Just over 61 percent of those surveyed hold bachelor’s degrees, and more than half said that their level of education was important in securing their current job.
When asked to estimate the largest amount of student loan debt they have carried, close to 30 percent said they have carried more than $40,000 in debt, which is the national average. Just over 26 percent said they have carried between $20,000 and $40,000. Notably, 65.4 percent of respondents said they have experienced difficulty making their student loan payments, despite the salaries provided by their employer. Just over 38 percent of the survey respondents earn between $25,000 and $50,000 annually, 34.3 percent earn $25,000 or less annually, while 27.4 percent earn $50,000 or more.
“Given age groups represented by respondents, 71.9 percent of which qualify as millennials, this appears to confirm that many younger employees are still finding their financial footing despite long-term income prospects,” IonTuition said in the report.
Respondents also reported a lack of understanding about their student loan debt, including more than one-third who reported that they lack understanding of the student loan repayment options available to them, indicating a strong disconnect between student borrowers and the loan counseling they are required to receive if they take out federal student loans.
In fact, more than half of the respondents said they did not receive entrance counseling before they took out their loans. Among the 68.8 percent of respondents who either do not remember or did not receive counseling, 66.2 percent reported difficulties in making their payments, including 70 percent who are unaware of what their options are if they are unable to make their monthly payments. Close to 60 percent said they are not aware of how they can deal with payment difficulties when they arise, and many had a poor understanding of income-driven repayment options. Only 35 percent of respondents who are currently in repayment are confident they will be able to pay off their debt.
According to IonTuition, there are “opportunities for employers to alleviate these stresses and increase both retention and productivity” among their employees with student loan debt who are “looking to their employers for help managing their student loan burdens.”
A majority of respondents – 57.8 percent – said they would benefit from employer-provided information and tools to help with student loan management, such as contributions toward their student loan balance, student loan refinancing options, or tuition reimbursement. A 2016 survey of employers also conducted by IonTuition had a similar finding, in which 67 percent of managers said their employee would benefit from access to student loan counselors.
However, 64.4 percent of respondents in the most recent survey said that their employer does not currently offer any assistance or tools to help manage student loan debt.
If employers were to offer education benefits, the most popular option reported by respondents was student loan contributions to help pay down their balances, which 87.8 percent said would be a valuable addition to their employee benefits. Online platforms with calculators, notifications, and budgeting tools and in-person student loan counseling were also viewed as beneficial to employees, 62.2 percent and 56.8 percent. Just over 48 percent said that a hotline with information about income-driven repayment would be beneficial, and 64 percent said that one-on-one student loan counseling would be a valuable benefit. Educational workshops also received support from 32 percent of respondents.
Publication Date: 12/23/2016