Survey: Young Workers Face Substantial Worry About Student Loan Repayment
By Brittany Hackett, Communications Staff
Young employees are feeling the burden of student loan debt, often worrying about how to repay their debt and wishing they had more assistance from their employers for managing their debt, according to a recent survey from American Student Assistance (ASA).
The online survey, which was conducted in January 2017, includes responses from 502 employees between the ages of 22 and 33 and 451 human resource (HR) managers at companies with at least 100 employees. The results of the survey examine the challenges faced by young employees with student loan debt, as well as their desire for workplace benefits like financial literacy, one-on-one counseling, student loan repayment, and sign-on bonuses.
According to the results, more than 50 percent of young workers worry about repaying their student loans all the time (26 percent) or often (30 percent), while 25 percent only worry about it sometimes. Just 6 percent said they do not worry about their student loan debt at all. Regarding which financial obligations they worry about the most, student loan debt tops the list for young workers at 31 percent compared to 26 percent who worry most about credit card debt and 28 percent who worry about all their obligations equally.
But while young workers tend to worry about their student loans constantly, only 14 percent of HR managers think their young employees worry about their student debt all the time, though 43 percent said they think student loans are often a worry for their workers.
Just over half of young workers said that student loan repayment is one of the most important employer benefits, just behind health insurance (82 percent) and a 401(k) match (74 percent). In fact, 86 percent of young workers said they would commit to their employer for five years if they offered student loan repayment assistance. Young workers also ranked these five possible types of student loan debt assistance as follows:
- A sign-on bonus to specifically help with student loans: 93 percent;
- A match similar to a 401(k) match to help pay down student loans, 92 percent;
- Overall long-term financial planning, 89 percent;
- Financial literacy training, 82 percent; and
- Providing free access to a counselor to discuss options, 79 percent.
Young workers are also much less focused on saving for retirement than they are with paying off their student loan debt, with 54 percent saying that paying off their student loan debt comes before saving for retirement.
That finding corresponds to a second recent report from ASA that examines how older generations of Americans are facing more student loan debt than before, leading them to delay or fail to save for retirement altogether, which can have a “profound impact” on their finances later in life. The report offers several recommendations, including:
- Decreasing student loan debt burdens by pushing for policies that reduce college debt (such as increase grant aid), increasing access to college planning services for family members who want to help support students, and reforming policies and information for PLUS borrowers;
- Helping to manage existing debt by expanding income-driven repayment plans for parent loan borrowers, developing more concise information for older borrowers who would like to take advantage of federal student loan repayment plans, and working on better communication for seniors who face Social Security garnishment.
Publication Date: 3/23/2017
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