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Employee benefits, student loan debt, and the modern workplace
The problem for employers
The modern workplace is evolving more quickly than ever before — and HR leaders are discovering designing an employee benefits program that can keep up is easier said than done. Today’s employees expect more than just basics like health coverage and retirement, and flashy perks like catered lunches and that ping-pong table in the break room just aren’t cutting it anymore.
The problem for employees
It’s no secret that student debt is a problem. For years, rising tuition costs have pushed students to borrow thousands of dollars in high-interest loans that take decades to pay off — and in the meantime, lock borrowers in a state of constant stress and hold families back from financial security.
And with federal student loan repayment officially back in full swing after a more than three year-long moratorium, borrowers’ stress, confusion, and uncertainty is at an all-time high.
The solution for everyone: student loan employer benefits
So how can employers design a benefits program that really meets the moment — and maximizes ROI? The answer: student loan employer benefits. And with the number of organizations offering these perks trending upwards, it looks like HR leaders are starting to catch on.
What you’ll learn in our guide to student loan employer benefits
- Why student loan benefits are key to making an impact — across every employee population — at scale
- How student loan employer benefits can help meet your business objectives
- Why now is the time to take action
- How to design a student loan benefit offering that works for you — no matter your budget, timeline, bandwidth, or other requirements
- How to get started
Who has student loans? How much student debt do my employees owe?
2 in 3 college attendees
The scale of student loan debt is jaw-dropping. 2 in 3 college-educated Americans leave school with student debt, spanning every generation, profession, gender, and race. 1
Ranked #2
Student loans are the second most common source of consumer debt, ranking below mortgages and ahead of credit cards. 2
$1.644 trillion
The national student debt balance totals $1.644 trillion, landing borrowers with an average balance just over $40,000. 3
$503
Two-thirds of undergrads leave school with student debt and face monthly payments totaling $503 on average. 4
Student debt by generation
Millennials & Gen Z 5
- Three times as likely to take out $50,000+ in loans than older generations.
- 80 percent borrowed (or will borrow) to fund their education, compared to just a third of Gen X-ers and Baby Boomers.
Gen X 6
- Owe the highest average per-borrower balance ($44,240) of any generation.
Baby Boomers 7
- 1 in 5 indebted borrowers is over the age of 50.
- Balance owed is growing faster than that of any other age group, driven by Parent PLUS loans borrowed to help their children pay for college.
Average outstanding student debt
owed by age group 8
owed by age group 8
$23.8K
20s
$42.0K
30s
$44.8K
40s
$45.1K
50s
$37.3k
60+
Student debt by degree type
Depending on the typical educational attainment in your organization’s industry, your workforce’s average student debt load can range from bad (around $30,000 borrowed for the average Bachelor’s degree) to worse (well into six figures for advanced professional and medical degrees). 9-13
Average student debt at graduation by degree type
Figures for advanced degrees do not include student debt accrued from undergraduate or other degrees.
Associate’s
$19,600
Bachelor’s (public)
$27,700
Bachelor’s (private)
$30,800
Master’s
$44,900
MBA
$52,600
MSW
$82,300
PhD
$107,500
JD/LLB
$113,300
MD
$202,450
BSN
$23,711
MSN
$47,321
DDS/DMD
$304,824
Pharm.D
$179,514
DVM/VMD
$183,302
Student debt by gender and race
Women and people of color face greater barriers to financial health, stability, and wealth creation opportunities their whole lives — and borrowing for school is no exception. These groups are more likely to borrow, to owe more, remain in debt for longer, and struggle with repayment than their male and white peers. 14
- Two-thirds of the total national student debt balance is owed by women. 15
- Four years after graduation, 48% of Black students owe an average of 12.5% more than they borrowed, while 83% of white students owe 12% less than they borrowed. 16
- 6% of white borrowers are behind on their student loan payments, compared to 20% of Black borrowers and 23% of Hispanic borrowers. 17
Cumulative debt from women borrowers’ undergraduate loans, one year after graduation 18
$36,184
Native American/
Alaska Native
$27,606
Asian
$41,466
Black/African American
$29,302
Hispanic/Latina
$38,747
Pacific Islander/Hawaiian
$38,851
White
How does student loan debt impact employees?
Leaves workers on the edge of crisis
Dictates lifestyle and details goals
- More than half of borrowers say their student debt has hurt their career goals. 22
- 1 in 2 employees with student debt puts off or decides not to go back to school to avoid taking on more debt. 23
- A third of borrowers pay more for student debt than for housing each month. 24
- 4 in 5 borrowers have delayed life events like marriage, having children, and buying a home due to their student debt. 25
Why should employers offer student loan benefits? Why now?
After more than three years of a moratorium that began as a pandemic-era relief program, federal student loan repayment has resumed in full swing — a financial turning point that is reigniting the fight to engage, retain, and recruit employees. It’s no secret that employees don’t stop worrying about their personal finances just because they’re on the clock. But with many Americans’ financial stress at an all-time high, offering benefits that address the most common causes of that financial stress — including student debt — is key to keeping employees engaged.
Financial stress drives poor workplace outcomes
Student debt drives financial stress
Student loans benefits are a proven solution
- 86% of workers say they’d commit to a company for at least five years if they were offered student loan benefits. 34
- Three-quarters of workers say student loan tools would increase their commitment to their employer. 35
- 95% of young professionals say they’d accept a job offer if it included a student loan repayment benefit. 36
- Millennials, who will make up 75% of the workforce by 2025, are the most likely to have student debt and the most likely to seek new jobs. 37
How employers can leverage federal programs to reach their own benefits objectives
By offering student loan benefits, employers can play a critical role in maximizing the impact of federal student loan programs – and reach their own business objectives at the same time.
SECURE Act 2.0 student loan retirement matching
For many, saving for the future comes in second to the much more immediate — and daunting — task of paying off student loans. But by allowing employers to match employees’ student debt payments with tax-advantaged retirement plan contributions, SECURE Act 2.0 eliminates the need for borrowers to choose between loan repayment and long-term financial security.
The potential impact of these student loan retirement match programs is huge. After all, a quarter of the 30 million Americans who are eligible for but not enrolled in their employer’s retirement plan cite their student loans as the reason they don’t participate, 38 and even those who are enrolled save significantly less than their non-indebted peers. 39
Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF) was launched by the ED in 2007 with the promise of canceling borrowers’ remaining federal student debt after they’ve worked in the public sector full-time for ten years. Due to confusing eligibility requirements and a hefty administrative burden, PSLF went severely underutilized for many years until 2021, when the Biden administration kicked off an initiative to reform the program.
This initiative has helped hundreds of thousands of borrowers access PSLF — and receive loan forgiveness — in the years since, and has enabled PSLF-qualifying employers to much more effectively leverage PSLF as a retention and recruitment strategy.
How to design and implement a student loan benefit program
Student loan benefits come in all shapes and sizes – and can be tailored to any budget, industry, or company size. Today’s most in-demand student loan benefits include:
Student loan benefit program design ideas
When designing your student loan benefits program, key considerations include:
What are your goals for offering a student loan benefit?
How does a student loan benefit fit in with our other benefits offerings?
Do you want to offer a student loan benefit to everyone, or only to specific employee demographics?
What special considerations about your organization should influence your program design? For example, non-profit and other qualified public service organizations can offer special benefits that help workers qualify for federal student loan forgiveness.
Example program models
A software company offering repayment contributions
Solutions: Student Loan Employer Contributions, Core platform
Eligibility: All employees with student debt
Contribution frequency: Monthly
Contribution amount: $100
A hospital system offering repayment contributions and PSLF solutions
Solutions: Student Loan Employer Contributions, Public Service Loan Forgiveness, Coaching, Core platform
Eligibility: All employees with student debt; contribution amount varies by employee tenure
Contribution frequency: Quarterly
Contribution amount:
0-1 years: $200
1-5 years: $400
5+ years: $600
A consumer goods brand offering a student loan retirement match program
Solutions: Student Loan Retirement Match, Core platform
Eligibility: All employees with student debt
Match frequency: Annually
Match amount: Up to 3.5% of employee’s annual salary matched
A public school district offering coaching services and PSLF solutions
Solutions: Coaching, Public Service Loan Forgiveness, Core platform
Eligibility: All employees with student debt
Frequency:
- All employees: Unlimited access to PSLF and Core platform
- Full-time employees: One coaching session per quarter
- Part-time employees: One coaching session per calendar year
Working within budget constraints to design a student loan benefit program
Common strategies for tailoring your student loan benefit to your budget include:
Offerings
When introducing a new student loan benefit, starting with offerings that aren’t contribution-based (such as optimization tools and coaching services) can help a tight budget go further.
Tiered contributions and eligibility
Consider designing a student loan repayment contribution that tailors eligibility and contribution amount based on specific criteria (e.g. years of service or job type) — plus, the eligibility criteria and contribution amounts can always be adjusted later on.
Optionality
Allowing participants to choose their own financial and/or holistic wellness perks from a selection of offerings can help deliver student loan benefits to the employees who need them most while staying spend-savvy.
Checklist: student loan benefit implementation
1. Ideation
Plan budget
Define goals and timeline
Identify internal stakeholder
2. Design
Select benefit offerings (repayment contributions, optimization solutions, etc.)
Secure external partners and service providers
Define eligibility criteria
Create internal program design documentation
3. Planning
Assess program tax implications
Review compliance needs
Create communications plan
Update existing benefits collateral
Train program administrators
4. Launch
Execute communications plan
Host informational webinar for employees
Enroll participants and collect student loan data
Why choose Candidly for your student loan employee benefits program
The time for student loan benefits is now – and Candidly can help you meet the moment with a proven solution with demonstrated results.
We partner with employers — of all sizes, and across all industries — to tackle the modern workforce’s top barrier to financial wellness while strengthening engagement , supercharging retention, and building inclusive, holistic workplace wellness. Our benefits platform include capabilities for:
Student loan repayment contributions and retirement match programs
AI-driven guidance and repayment optimization technology
One-on-one, live coaching services
Public Service Loan Forgiveness tools
Private student lending marketplace
Emergency savings solutions
Tuition reimbursement
Speak to Candidly about getting your Candidly benefit program up and running
1 https://ticas.org/wp-content/uploads/2019/09/classof2018.pdf
2 https://educationdata.org/student-loan-debt-statistics
3 https://educationdata.org/student-loan-debt-statistics
4 https://thecollegeinvestor.com/33643/average-student-loan-monthly-payment/
5 https://educationdata.org/student-loan-debt-by-age
6 https://www.onlineu.com/magazine/generational-attitudes-paying-for-college
7 https://www.bankrate.com/loans/student-loans/student-loan-debt-by-generation/#genz
8 https://educationdata.org/student-loan-debt-by-age
9 https://www.bloomberg.com/news/articles/2021-06-17/student-loan-growing-share-of-1-7-trillion-debt-pile-held-by-older-americans
10 https://www.savingforcollege.com/article/average-student-loan-debt-at-graduation
11 https://www.nerdwallet.com/article/loans/student-loans/average-nursing-student-debt
12 https://www.bankrate.com/loans/student-loans/average-dental-school-debt/
13 https://www.nerdwallet.com/article/loans/student-loans/average-student-loan-debt-veterinarians
14 https://www.nerdwallet.com/article/loans/student-loans/average-pharmacist-student-loan-debt
15 https://educationdata.org/student-loan-debt-by-gender
16 https://educationdata.org/student-loan-debt-by-race
17 https://educationdata.org/student-loan-debt-by-race
18 https://educationdata.org/student-loan-debt-by-race
19 https://educationdata.org/student-loan-default-rate
20 https://educationdata.org/student-loan-default-rate
21 https://thehill.com/changing-america/enrichment/education/3658639-majority-of-student-loan-borrowers-link-mental-health-issues-to-their-debt/
22 https://www.zippia.com/advice/student-loan-statistics/
23 https://www.zippia.com/advice/student-loan-statistics/
24 https://www.yahoo.com/now/third-borrowers-spending-student-debt-rent-160918214.html
25 https://www.surveymonkey.com/curiosity/cnbc-invest-in-you-jan-2022/
26 https://tiaa.new-media-release.com/mit-agelab/downloads/AgeLab_Student_Debt_Executive_Summary.pdf
27 https://www.prnewswire.com/news-releases/Americas-spend-more-than-20-of-their-take-home-pay-on-student-loan-debt-impacting-their-long-term-financial-health-300898679.html
28 https://educationdata.org/student-loan-debt-by-race
29 https://shrm.org/ResourcesAndTools/hr-topics/benefits/Pages/Employees-Financial-Issues-Affect-Their-Job-Performance.aspx
30 https://www.adp.com/spark/articles/2018/10/whats-on-your-employees-minds-financial-stress-and-workplace-performance.aspx
31 https://www.pwc.com/us/en/services/consulting/business-transformation/library/employee-financial-wellness-survey.html
32 https://www.cnbc.com/2017/10/17/student-loans-take-a-mental-toll-on-young-people.html
33 https://www.dpeaflcio.org/factsheets/student-debt-a-critical-challenge-facing-professionals
34 https://www.shrm.org/topics-tools/news/benefits-compensation/employers-explore-repaying-student-loan-debt
35 https://www.pwc.com/us/en/services/consulting/business-transformation/library/employee-financial-wellness-survey.html
36 https://www.forbes.com/sites/laurencebradford/2018/03/30/student-loan-repayment-the-job-perk-of-the-future/
37 https://www.cbre.com/insights/articles/what-millennials-really-want-in-the-workplace
38 https://tiaa.new-media-release.com/mit-agelab/downloads/AgeLab_
39 https://fortune.com/2022/12/21/omnibus-bill-could-help-student-loan-borrowers-save-retirement-401k/
40 Based on Candidly platform data retrieved as of January 2024.
41 Based on Candidly platform data retrieved as of January 2024.
42 Measured by employee census data from May 2022 – October 2023.