Stay informed and ready to meet both everyday challenges and long-term planning and policy-making goals, with focused news, practical information, and strategic insights on all HR-related...
Workers over 35 are increasingly worried about their financial health. They fear that persisting student loan debt is inhibiting their ability to save effectively for retirement.
“Student loans will affect almost all Americans over the age of 35,” Balaji Rajan, chief executive officer of debt solution management provider IonTuition, told Bloomberg BNA April 12. Employees are struggling to meet their financial goals, and businesses have a unique opportunity “to help workers of all ages,” he said.
New research from IonTuition found that 60 percent of employees over 35 say student loan debt is hindering their ability to save for retirement.
Furthermore, in a survey of more than 900 student loan borrowers over the age of 35, IonTuition found that 37 percent had fallen behind on their student loan payments and 17 percent had defaulted on their student loans.
IonTuition found that 74 percent of of Americans over 35 who took out student loans are still paying them off, and for Generation X and baby boomers, “this is an unexpected burden,” Rajan said.
Nearly three-fourths of respondents did not expect to be repaying student loans at this stage of their lives, and among baby boomers alone, that number jumped to 94 percent, he said.For many baby boomer employees, the student loan debt was incurred because they have co-signed on a loan for either a child (71 percent), a spouse (21 percent) or a grandchild (4 percent). Respondents took on this debt because the borrowers either did not qualify on their own because of low credit scores, had already maxed out their federal student aid debt limit or were falling short of tuition costs, IonTuition found.
The help has continued past just accessing the loan, however. Over 70 percent of Generation X and baby boomers have had to assist with payments, and 48 percent of respondents said they are concerned that the borrower for whom they co-signed might not pay back the loans, Rajan said.
Getting to the root of financial wellness support requires employers to consider a couple of dynamics for why employees are experiencing distress, Jeff Tulloch, vice president of MetLife’s PlanSmart organization, told Bloomberg BNA April 13.
One factor may just be that an employee’s income-to-expense ratio leaves them with zero disposable income. But employers also have to think about the behavioral choices that could leave employees anxious about their finances, Tulloch said. For example, “It feels good to spend money,” whether it’s a new pair of shoes, going on vacation or even going out to dinner, he said.
“The starting point is for employers to step back and realize that those two dynamics are in play” as they look to assess the best financial wellness program. Education programs are a great place to start, Tulloch said. Most employees “have never had any level of financial education,” and becoming informed can reduce the fear, stress and anxiety about saving for retirement or solving financial needs, he said.
But every employee has a unique set of financial needs, so employers also will need to explore ways to motivate employees to make health financial decisions beyond just financial education, Tulloch noted. “It’s not just offering solutions and benefits and tools to employees, but going beyond that and promoting and communicating what is available to employees,” he said.
“There’s a real win for HR” in succeeding at communicating effectively with employees about these benefits, Tulloch said. “At the end of the day, education plus motivation plus access equals the action” to be more financially healthy.
To contact the reporter on this story: Genevieve Douglas in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Tony Harris at email@example.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)