Companies Can — and Should — Help Employees Pay Student Loans

The enormity of the student debt crisis is staggering. The Federal Reserve has reported a record-breaking $1.7 trillion in federal and private student loan debt, which is currently held by more than 44 million Americans.

This burden has enormous repercussions. Recent graduates may experience a narrowed sense of possibility; decisions like when to start a family or buy a home can become overwhelming in the shadow of debt obligations. The challenge of saving for retirement while paying off student debt may also deter entrepreneurship and risk-taking, which are crucial economic drivers. Moreover, the stress and strain caused by economic insecurity can impact everything from well-being to productivity. Financial issues are commonly cited as a leading cause of stress; in one study, 80% of surveyed employers reported that an employee’s personal financial issues affect job performance.

We also know that education is a critical gateway to the digital economy. Yet, many families lack the resources to invest in that education for their children and may be deterred by the prospect of burdensome debt. Through our efforts to recruit new graduates to PwC, we also hear frequently from university presidents about the surge in mental health issues on campuses due in part to economic insecurity — and now, of course, concerns about mental health and well-being have been greatly exacerbated by the pandemic. The student debt crisis intersects with well-being, the digital skills gap, growing income inequality, and racial disparities — and requires innovative solutions by policy makers, institutions of higher education, and employers.

Five years ago, our leadership team decided we wanted to do our part to help address ballooning student debt by introducing a student loan paydown (SLP) benefit. With 9,000 entry-level hires each year in the U.S. alone, PwC is one of the largest employers of recent graduates. Student debt impacts a significant number of our applicants and employees, particularly those from underrepresented groups. Our organizational purpose includes building trust and solving important problems, and we realized we could make a difference by helping our people while being guided by our purpose.

From the initial pilot period through the rollout phase and broad adoption from eligible employees across our firm, we’ve learned a lot about designing a program like this. It takes time and thoughtfulness to drive an effort at this scale — including early R&D and getting the nuts and bolts right — but that doesn’t mean that business leaders should be deterred if considering a similar endeavor. We’re sharing our journey from the first steps to our learnings and results so that more companies can implement a benefit that seamlessly helps pay off student debt while helping address this growing societal issue.

Applying Human-Centered Research and Design

Although there were many potential advantages to offering student loan assistance, we knew we had to carefully assess the design of the program with the end user experience in mind at each step of the way. While today there are a growing number of employers who have introduced similar student loan repayment efforts, five years ago we were one of the first companies to announce this kind of benefit. We wanted our effort to succeed for our organization and our people, as well as provide a model for others. We took several steps to enable a successful rollout and launch:

Research

Financial literacy has long been a priority for our firm, as we’ve designed and delivered education programs to help build a more tech-skilled workforce and equip students with the financial, tech, and career skills they need. Through these programs, in addition to relying on extensive research conducted with George Washington University, we found that 54% of millennials are concerned about their ability to repay student loan debt, and 80% of college-educated millennials…