We think companies should help their employees pay off their student debt. Now nearly 40% of Americans agree, as shown by the results of a recent survey conducted by data and insights firm Hearts & Wallets. This is a surprising contrast to just 25% of respondents saying employers should contribute towards employees’ retirement.
“It was just shocking to us that a thing that so many people in the industry take for granted — that employers should provide for retirement — was so misaligned with what consumers were thinking,” says Laura Varas, CEO of the Rye, N.Y.-based research firm.
Unsurprisingly, however, this is the first time respondents were actually asked about their stance on employers' participation in student loan repayment.
Another unexpected finding was that over 30% of respondents who plan to retire in the next five years also support employer’s making contributions to pay off employees’ student debt. This shows that student loan benefits are not just relevant for entry level hires and recent graduates, but also those much farther into their career, and even those at the tail-end.
Support for student loan benefits is even strong among employees with the lowest student loan balances. Over half of those with student loan balances of below $5k responded that employers should contribute to paying off student debt, according to the same survey.
This shift in consumer preference will likely impact product development trends, too. Saving for retirement simply cannot be a priority for people who have less than $50k in investable assets, according to Hearts & Wallets, and oftentimes is not an option at all for borrowers budgeting around high monthly interest payments. Asset managers, and employers alike, should recognize that today’s savers now have different goals and different options than just a few years ago.
“Closing a debt feels more urgent … than missing out on opportunities to save,” says Ayelet Fishbach, professor of behavioral science and marketing at the University of Chicago. So while of course saving for retirement remains important to most Americans, there is a discernible tidal shift away from blindly throwing money at such long-term goals as outstanding student debt increasingly dominates the financial mindset of Americans.
Interested in joining the hundreds of companies that are helping employees pay off student loan debt? Reach out to me at [email protected], I’d love to introduce you to our solution!