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Last Update: January 20, 2020

Employees of all ages are burdened with student loan debt.

In fact, the number of people over age 60 with student loan debt has quadrupled over the last 10 years, according to the Consumer Financial Protection Bureau (CFPB).

Older employees may be co-signers on student loans or have taken out Parent PLUS loans to fund their child’s education. The CFPB estimates that more than 57 percent of co-signers are age 55 and older.

Many recent studies and surveys show that adults of all ages aren’t saving adequately—or at all—for retirement, which significantly impacts employers and the economy as a whole. 

People with student loans are least likely to save.

A Center for Retirement Research study found that employees with student loans save half as much for retirement as those without loans.1

Those with small and large loans were just as likely to forgo saving for retirement.

The report concluded that policies reducing student loans based on income will not help—as long as there is a balance, this population will not save.

Bankrate found that 56 percent of employees under the age of 29 who have student loans put off saving completely, meaning they aren’t benefiting from compound interest. 

Saving less translates into retiring later, which is costly to employers: Healthcare costs for a 65-year-old employee are double that of a 45 year old, and a one-year delay in retirement costs $50,000 per employee in sick leave, personal leave, life and disability insurance and healthcare.2

Strategies to Reduce Debt While Saving for Retirement

A good financial wellness program will help employees learn different strategies to help reduce debt while saving, including taking advantage of employer matches while making at least minimum loan payments.

Financial wellness programs can also educate employees on the tax advantages of investing and benefits of refinancing.

Education About Savings Vehicles

According to TD Ameritrade's 2019 Retirement Pulse Survey3, Americans said that understanding advantages of saving vehicles is the number factor that could trigger or accelerate catching up on their long-term and retirement savings.

Employee financial wellness programs typically include interactive retirement courses which teach employees about the advantages of savings vehicles and the power of compounding over time.

Student Loan Repayment Benefits

According to a recent SCORE survey4 and an American Student Assistance Young Workers and Student Debt survey:

  • 80 percent of employees prefer benefits or perks to a pay raise
  • Over 75 percent of those with student loans want employers to offer a student loan repayment benefit
  • 80 percent of young workers would take advantage of student loan assistance, as well as training and financial planning
  • 48 percent of workers consider student loan assistance when choosing a job
  • 86 percent of new employees would commit to an employer for five years if they helped pay off student loans

However, only 11 percent of employers offer student loan repayment benefits even though they are proven to5:

  • Increase employee retention: An American Institute of CPA study showed that 80 percent of workers prefer to work for a company with great perks over one that offers 30 percent more salary without the perks.6
  • Increase productivity: A study from the Social Market Foundation shows that happy employees are up to 20 percent more productive.7 Because employees want student loan assistance, providing it should increase the happiness level.
  • Attract millennials: In PwC’s Employee Financial Wellness Survey, the most sought after benefit for millennials was student loan repayment assistance.8 Adding millennials to your workforce can bring your company a fresh perspective and increased technical skills at a lower cost than hiring more experienced workers.
  • Reduce turnover rate: Offering student loan repayment benefits makes employees feel valued and appreciated, which reduces turnover rate.

Whether or not your company offers a student loan contribution program, providing employees with a financial wellness program is essential.

Helping your employees understand the necessity of paying down debt while saving will increase employee financial wellness and your bottom line.

To find the right financial wellness program, look for one that is:

  • Valuable for all employees: With content that adapts to each user’s age, financial situation, life stage, etc.
  • Interactive: With features like video and gamification to increase engagement.
  • Unbiased: The platform should not pressure users to buy a particular product or service.
  • Recognized: Seek referrals, read reviews, etc.


Download the 2020 Employee Financial Wellness Report


1 - https://crr.bc.edu/working-papers/how-does-student-debt-affect-early-career-retirement-saving/

2 - https://www.prudential.com/corporate-insights/employers-should-care-cost-delayed-retirements

3 - https://s2.q4cdn.com/437609071/files/doc_news/research/2019/retirement-pulse-survey.pdf

4 - https://www.prnewswire.com/news-releases/four-in-five-employees-prefer-benets-or-perks-to-a-pay-raise-300670318.html

5 - https://www.ebri.org/docs/default-source/ebri-issue-brief/ebri_ib_470_wbs2-10jan19.pdf?sfvrsn=c5db3e2f_10

6 - https://www.aicpa.org/interestareas/businessindustryandgovernment/newsandpublications/economic-outlook-surveys-2.html

7 - https://www.smf.co.uk/wp-content/uploads/2015/10/Social-Market-Foundation-Publication-Briefing-CAGE-4-Are-happy-workers-more-productive-281015.pdf#page=9

8 - https://www.pwc.com/us/en/industries/private-company-services/library/financial-well-being-retirement-survey.html

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