NEW YORK, N.Y., February 4, 2019 – As the nation’s student loan bill soars to more than 1.5 trillion dollars, many working Americans are grappling with the consequences. Seven in ten working adults with college debt rate their finances as the major source of their stress compared to four in ten of those with no college debt, according to initial findings released from Guardian’s 6th Annual Workplace Benefits Study. Compounding this stress is that fewer working Americans feel they are making good progress toward paying off their college debt or saving for their children’s college education compared to two years ago. Consequently, 7 in 10 parents plan to use some retirement savings and investments (stocks/bonds) to pay for their children’s college education, putting their own financial wellness at risk.
These findings from Guardian’s report, “College Debt in America: The Case for Tuition & Loan Repayment Benefits,” focuses on how college debt is impacting workforce wellbeing, absenteeism, and productivity. For several decades, college tuition costs have been rising faster than wages and inflation, and employers are increasingly aware of the potential impact on its workforce. Guardian data shows millennials are the most interested in college-related benefits with 79 percent saying they would like their employer to offer a student loan repayment plan.
“A majority of Americans rely on the workplace for financial security and addressing college debt is one area of focus that is gaining momentum as a viable workplace benefit,” said Marc Costantini, Executive Vice President, Commercial and Government Markets, Guardian. “There is a growing interest among employers to differentiate themselves to attract and retain younger talent, and this workplace benefit can help make a positive difference in improving financial wellness among employees.”
Baby Boomer College Debt Grows
While much of the attention has focused on millennials who carry the majority of the debt, there is a growing trend of baby boomer parents who have over-extended themselves financially to help fund their children’s college education. More than 50 percent of baby boomers say that college debt is negatively impacting their ability to meet their financial goals, such as maintaining their lifestyle in retirement, according to Guardian’s data. Recent data from the Department of Education confirms that at the end of September 2018, 1.8 million borrowers age 62 and older owed $62.5 billion in federal student loan debt and those in the 50-61 age group owe $213.6 billion.
New Wave of College Education Benefits
With college debt at the forefront of today’s national conversation, more employers are taking notice and examining the impact that this financial obligation is having on employee engagement and productivity. For example, 7 in 10 employers say improving their workers’ financial wellness is a top benefits objective – up 15 percent since 2015. A diverse number of benefits are on the rise to help employees either pay down college debt or help save, such as student loan repayment plans, college tuition rewards, debt management resources, and access to financial advisors. Several pending Congressional bills could extend Section 127 (Education Assistance Programs) and accelerate this workplace trend.
Other key findings include:
92 percent say they would take advantage of an employer match for student loan repayments, similar to a 401K plan
Almost half of all working adults say that paying off college loans is a very important financial goal, up 24 percent since 2014
Less than 10 percent of all workers have access to college savings or debt-related benefits plans through their employer (i.e. tuition assistance, 529 savings plans, loan repayment).
To learn more about Guardian’s College Tuition Benefit which enables members enrolled in a Guardian plan to earn annual tuition rewards and save for college, click here. To download Guardian’s “College Debt in America” paper, click here.
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Brenda Mendoza Messinger
T: 212.919.3521 | Brenda_Mendoza@glic.com
Every day, Guardian provides Americans the security they deserve through our insurance and wealth management products and services. Since our founding in 1860, our long-term view has helped our customers prepare for whatever life brings whether starting a family, planning for the future or taking care of employees. Today, we're a Fortune 250 mutual company and a leading provider of life, disability and other benefits for individuals, at the workplace and through government sponsored programs. The Guardian community of 9000 employees and our network of over 2750 financial representatives is committed to serving with expertise when, where and how our clients need us. Our commitments rest on a strong financial foundation, which at year-end 2017 included $8.0 billion in capital and $1.6 billion in operating income. For more information, please visit guardianlife.com or follow us on Facebook, LinkedIn, Twitter and YouTube.