The current federal student loan portfolio totals well over $1.6 trillion spread out among more than 43 million individual borrowers [1]. Many of these borrowers work for companies of all sizes, including yours. These are frequently college graduates with the drive and skills to rapidly move forward in their careers who may have been holding back to ensure they can meet the financial obligation of $37,358 (on average) of student debt [2].
When new opportunities for student debt forgiveness are floated, employees unable to pursue development or learning programs to progress their careers will suddenly find new financial resources. Your HR team can rapidly adjust to the needs of these employees, to make sure you are retaining these key people!
1. Student Debt Relief Will Affect Your Employee’s Finances
New considerations must be made with the recent student loan forgiveness plan. The plan targets borrowers of federal loans with up to $20,000 in forgiveness for those Pell Grant recipients and $10,000 for the rest [3].
Employees who may have been playing it "close to the chest" financially in the past may suddenly take the opportunity of reducing more than half of their debt obligation as a sign to try other things. They will surely be seeking ways to improve current skills and reinvest in their learning.
Those employees you’ve been relying on to complete essential work tasks may suddenly have more financial freedom to explore other pursuits. The best way to ensure they will remain with your company is to provide upskilling, education, and growth programs.
2. Lower Debt Means Considering the Future
Most successful workers will make a career change about every 4.1 years [4]. This could be anything from a chef wanting to become a construction worker to a teacher pursuing a new career in website development. That average worker will change when a significant portion of the available workers in the US are given more mobility due to lower debt obligations.
A recent CNBC poll found that those getting student loan debt relief would most likely spend their newfound funding on savings or paying off other debt [5]. Once that commercial debt is eliminated, these working professionals will have a new nest egg to spend where they want. Without any opportunities inside their current company, they will seek external resources to grow, build a new business, or expand their skill sets.
In other words, lower debt leads to greater economic mobility. Things that were out of reach before are now attainable – all with the same income levels as prior to the proposed debt relief plan.
The upshot is this will create significant changes in jobs. People who may have been holding back from applying to your companies may suddenly take the risk because of greater financial cushioning. Yet another reason to offer perks like education, upskilling, and positive upward growth.
3. Attract and Keep Employees by Offering Skill Development
The vast majority of employees will stay with a company longer if that business invests in their career development [6]. Many job seekers looking to build a career will choose a company over a competitor based on the upskilling opportunities.
Right now is the best time to offer training in career development, complimentary skill acquisitions, and educational growth. Learning and development is a critical aspect of your business operations that has a direct return on investment, especially considering the changes about to happen because of the federal student loan debt relief program.
The only question left is what technology will integrate with your company’s needs to provide such learning opportunities. There have already been case studies written about the power of crafting a learning community to fulfill enterprise-level upskilling needs. To maximize your ability to meet the needs of these working professionals, leverage the comprehensive benefits provided by Amesite.
This platform allows you to track your team's upskilling efforts and provides new learning and development training anytime, anywhere. Amesite makes managing professional learning seamless. It instantly brings all the new, exciting happenings at your business to your employees! Lower any company concerns around those team members who may be receiving student debt relief and improve your upskilling provisions by contacting and implementing the easy-to-use solution from Amesite. Visit our website to schedule a consultation today.
[1] https://www.forbes.com/advisor/student-loans/average-student-loan-statistics/
[2] https://www.bestcolleges.com/research/average-student-loan-debt/
[3] https://studentaid.gov/debt-relief-announcement
[4] https://www.zippia.com/advice/career-change-statistics/
[5] https://www.americanprogress.org/article/canceling-student-debt-of-at-least-10000-will-help-lower-the-cost-of-living/
[6] https://www.forbes.com/sites/servicenow/2021/06/25/learning-leads-to-longtime-loyalty/?sh=216d26bf214c
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