Student loan debt nightmares are a real thing. CNBC notes that students are facing an “unprecedented financial challenge,” citing a report from Gradifi. Student loan debt has risen to $1.4 trillion, with the average student loan debt rising 62% in the last decade alone.
Average student loan debt reached above $30,000 for the first time in 2016, with the average student loan debt at $34,144 upon graduation.
Studies conducted in May found that 80% of professionals, currently working with student loan debt, consider their debt to be a significant source of their stress. Millennials are the age group hit the hardest, with these individuals sacrificing:
- Car buying
- Buying a home
Student loan debt has made it difficult for millennials to pay rent and buy much of the necessities that they need, such as food.
Typical loan payments for bachelor degree graduates are $265 a month. Some students are making payments that are much higher: $400 – $1,200 per month. The cost of student loans is often equivalent to a mortgage payment.
Medical graduate students are suffering from the highest payments in student loan debt, with an average cost of $1,600 per month.
Headaches, lack of sleep and stress have all been linked to student loan debt. More than half of student loan debt holders state that they fear their student loan debt is spiraling out of control. These individuals suffer the most side effects.
Gradifi surveyed 3,000 working professionals and found that 45% state that student loan repayment is the single most important employee benefit when searching for an employer.
“People with student loan debt are carrying a serious financial and emotional burden,” said Tim DeMello, Founder and CEO of Gradifi. “The pressure of making big monthly loan payments is taking its toll in terms of stress, housing affordability and quality of life. For employers, the research makes crystal clear that a student loan repayment benefit can create a decisive hiring advantage in recruiting highly skilled workers, while offering much-needed relief to borrowers.”
The survey also found that professionals, 58% of them, prefer that their employer help them pay off their student debt rather than contribute to the employee’s retirement.
Employers, slow to adopt student loan repayment benefits, are beginning to offer student loan repayment benefits. Even small contributions of $50 to $100 per month can mean a savings of more than $5,000 – $10,000 over a ten-year period. The savings are massive, with the contributions helping debtors pay off their debt three years faster on average.