The amount of money Americans collectively owe in student loan debt is staggering—having recently reached $1.6 trillion1 with expectations that there will be an average of $100 billion each year in new federal student loan debt for the next five years.2
While the impact on individual finances is obvious, the effects can also extend into the workplace through decreased productivity and higher turnover.
Attracting and retaining a competitive workforce often starts with helping employees improve their financial situation. However, savvy employers know it takes more than just a steady paycheck to find and keep talent … especially when those workers are struggling with student loan debt. For these workers, student loan assistance is one way employers can separate themselves from their competitors.
For its Student Debt Solutions Program, AIG Retirement Services has engaged Savi—a social impact technology firm—to provide employees with an online student loan evaluation tool to determine eligibility for federal repayment and forgiveness programs.
Employees answer a few questions on Savi’s secure website, and the software then determines the employee’s repayment options, including whether they qualify for any loan forgiveness program and shows them their potential savings. It also helps them maintain eligibility in the program with annual reminders and with applying for full forgiveness at the end. Participants access the program by logging into their AIG Retirement Services account. It’s a step-by-step digital process that guides student debtors.
The program also provides access to Savi’s analysis of the new student loan rules in the CARES Act as well as other actions that may be taken by the government.
As employers think about helping employees take control of student loan debt, it’s important to understand that the issue impacts all generations.
Student loan debt may peak at age 34, but the average amount of student loan debt among older Americans is increasing.
Ironically, many of these older borrowers took the loans to help their children and grandchildren. But the impact on their finances is anything but helpful. In fact, many are unable to retire because they can’t afford to pay back the loans without working.
A closer look at younger generations reveals the depth of their troubling student loan dilemma. Money Matters on Campus—an EVERFI study sponsored by AIG—shows that many recent and soon-to-be college graduates begin their professional lives burdened by financial anxiety and soaring student loan debt.
AIG Retirement Services is also looking to expand its Student Debt Solutions program to include:
- A certification program for our team of financial professionals that will enable them to better help employees understand the impact of college funding, including the complex student loan forgiveness process.
- A loan repayment platform for employers who want to help employees pay down their student debt.
1 Consumer Credit G.19. Federal Reserve.
2 Income-Driven Repayment Plans for Student Loans: Budgetary Costs and Policy Options. Congressional Budget Office.