Student loan debt, in 2018, has continued its climb. This month the Federal Reserve Bank of New York announced student debt now totals over $1.41 trillion in outstanding loans. Student debt is now the second largest source of household debt. In fact, student debt is the only form of consumer debt to grow preceding the Great Recession.
Student Loan Debt and Financial Wellness
A new study from a technology company, CommonBond, revealed interesting results regarding the effects of student loan debt and your employees’ financial wellness.
The numbers this study reported are eye-opening. Your employees both desire and value student loan repayment as an employee benefit. Still, student loan repayment, depending on its setup, can become expensive for a business.
So, as an organization, you have to decide whether this benefit is worth the price tag. When making this decision keep in mind the final stat from the above infographic. Only 50 percent of employees see their employer’s benefits offerings as innovative. Meanwhile, 71 percent of HR executives said the same thing.
Using effective benefits, like student loan debt repayment is a great place to lessen the divide between these two groups. This benefit can improve both employee productivity and perception of the company’s benefits plan.
Learn more about student loan debt repayment.
The Effects of Financial Stress
As previously stated, student debt is now the second greatest source of household debt. And this debt is likely having a more significant impact on your staff than you realize. Financial stress can wreak havoc on an employee’s health and productivity.
This kind of stress can result in increased anxiety and depression. Additionally, Cambridge Credit Counseling says financial stress can also worsen such health issues as:
- Heart Disease/Attack
- Gastrointestinal Problems
- Weight Gain/Loss
- Eating Disorders
- High Blood Pressure
Financial stress has a similar adverse effect on a business. Last year, from Mercer, found that U.S. employers lose up to $250 billion in lost wages due to financial stress. According to the study the average employee spends 13 hours per month, at work, worrying about finances. And 16 percent of respondents, spent more than 20 hours.
The Financial Fitness Group has reported similar statistics that illustrate the impact of financial stress on the workplace. Financial Fitness reported financial stress is affecting a whopping 80 percent of employees. This stress, according to HR Dive, decreases employees’ productivity.
As student loan debt continues to build, the role of an employer in helping reduce this debt is only likely to grow. Controlling your financial wellness is important, but due to student loan debt, mostly unattainable for many on your staff. Help these employees, and your business overall, by implementing student loan debt repayment.