Dive Brief:
- Before they even graduate, college students can feel the pressure of financial stress. A recent EVERFI survey sponsored by AIG of more than 30,000 students revealed many are unprepared to manage their money. The results suggest that student loan anxiety will burden these new professionals as they enter the workforce, according to the report.
- Almost half of those surveyed, 47%, said they are unprepared to manage their finances. More than half, 60%, have already taken or plan to use student loans to finance their education, but only 65% of borrowers have a plan to pay off their loans on time and fully, EVERFI said.
- EVERFI noted that only 11% of Gen Z borrowers believe they have the information they need to pay off their loans. Overall, 22% of college students have this confidence, which could indicate a generational knowledge gap on the subject, according to EVERFI.
Dive Insight:
College students aren’t alone in stressing about money management. Recent data shows employees are looking to their employers to help with financial literacy and planning. Information about retirement savings and planning, managing a budget and building emergency savings are the subjects workers most want to learn about, according to a Prudential Financial Inc. survey.
Still, despite stress and frustration, only about 30% of employees surveyed for a 2018 report used employer-provided financial wellness programs — even as they reported struggling financially. The disconnect could indicate that financial education is not the only relief that will work for employees.
Almost 80% of workers with student loan debt would like their employer to offer a loan payment benefit, according to a 2018 study. And such a benefit is quickly becoming a possibility: The IRS recently approved an employer's 401(k) program that, unlike some loan payment programs, makes payments to 401(k)s exempt from tax deductions. Large employers like PwC aren't the only ones offering some variation on the benefit, either; about one-third of job candidates report some form of student debt benefit offered by employers they've met with. Some employers' plans contribute to principal loan payments up to a certain amount, while others allow workers to trade in unused PTO for loan relief. HR pros considering the benefit would need to decide what option best suits their workers and budgets.