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Student debt is a pervasive issue for nearly 1 in 5 adults in the US, and a barrier to financial security for many of them. Its impact is disproportionately felt by workers who are Black, Latinx and women. As student loan payments resume this month after being paused for several years during the pandemic, the financial implications of student loan repayments on both short-term finances and retirement are on the minds of American workers.
But why does the student debt of their workforce matter to employers? There are three major reasons that employers need to be paying attention to developments in student loan debt repayment. First, student loan debt affects financial security and stress levels – which has an impact on a firm's productivity and bottom line. Secondly, employers have increasingly recognized their role in employee financial wellness over the past several years – and student loan debt is a major part of the employee financial picture. And finally, there is potential for student loan benefits to impact equity, due to the disproportionate debt load carried by workers who are Black, Latinx or women.
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