More CEOs, and their marketing and HR chiefs, are recognizing that helping debt-strapped millennial workers and consumers ease their debt loads—or not have to take on as much in college loans in the first place—could help position their companies and brands nicely with America’s biggest demographic cohort, as 20- to-35-year-olds also struggle with an employment picture that has been pretty dismal until recently.
PwC has made the biggest splash with its offer of up to $1,200 in annual student-loan assistance to workers at the most junior levels. But other companies, including Credit Suisse, Martin Health System, Memorial Hermann Health System, and startup online food-ordering platform ChowNow, are offering their own initiatives to help employees mitigate student debt.
The latest employment numbers, of course, offer hope that at least student-debt woes might not get significantly worse, because college graduates are back in demand. That means more of them will be able to pay off or keep up with loans they accumulated in higher education.
Employers expect to hire 15% more college graduates in the current academic year than a year earlier, according to a recent survey by Michigan State University. Sixty-eight percent of employers said growth was driving their plans for talent acquisition, which ranked as the highest in the survey since 2008.
Of course, when it comes to student debt, the staggering number of unpaid loans and interest serves as a competitive edge for companies with regard to benefits.
According to the most recent federal-government numbers, more than 40 million Americans now have student loan debt, totaling more than $1.2 trillion. The average debtor carries balances of about $35,000. And only 37% of them are making payments on time and reducing their balances.
“Given the evolving lifestyle of today’s youth, your marketing efforts need to reflect accurate life stages, correct price points and sensitivity to the fact that many are shackled to an incredible amount of debt,” argued Aaron Paquette, an executive vice president of Vision Critical, in MediaPost’s Engage: Teens newsletter.
Paquette urged brands to work harder on providing ways to mitigate this problem, including doing more work on the front end—such as by providing more college-scholarship opportunities for millennial workers and customers, and providing flexible work opportunities for college students— so that new school debts don’t become as burdensome.
“Millennials who have taken on college debt place great value on employer investments in their education,” Matthew Rascoff, vice president of online programs at the University of North Carolina, told CEO Briefing. For instance, he said, “Smart employees value tuition-reimbursement programs at greater than their cash value, because these programs send a signal that an employer invests in its people.”
PricewaterhouseCoopers says that, beginning in 2016, the accounting and consulting firm will help out its younger employees by paying off part of their student debt for six years. Millennials don’t have to work a certain number of years to qualify for this bennie, and if they leave the company, they still receive the benefit for time served.
PwC is one of a growing number of companies that is turning to crowdsourcing startup Gradifi to help with such benefits. Gradifi allows debt-laden students to open an account with them and provides ways that members of their support system—ranging from employers to loved ones—can help them whittle away at their own debt pile.
Overall, however, companies have been slow to respond to this particular opportunity with their millennial employees. Surely more will follow, however. If you haven’t yet considered it, it could be a great way to curry favor among the coveted millennial generation.