When we get a chance to scroll through our Facebook feeds, there seem to be many links to blogs and articles proclaiming the “top things 20-somethings want in the workplace.”
While sometimes valuable in content, these articles often fail to mention one huge hurdle that prevents millennials from participating in the local economy: massive student loan debt.
According to Bloomberg Business, the percent yearly increase of the average cost of higher education has, for decades, outpaced the rate of inflation.
As the cost rises, more and more Americans are making the choice (at as young as 18-years-old) to take out loans.
Outstanding student loan debt not only hurts our economy by limiting the disposable income of young professionals, it also limits the purchasing power of the parents of these students, who may have taken out their children’s loan in their own name.
In 2013, it was estimated that about 70 percent of graduating seniors left undergrad with student loan debt.
The interest accruing on these loans ranges from 6.8 percent to 8.75 percent.
My wife and I graduated in 2011 and she received her master’s degree shortly after.
Ours is not a unique story: we lived at home before marriage to save money for our wedding, are waiting to have children until we pay off some of our debt, and are paying 1.4 times the cost of our mortgage in student loan payments per month.
None of these points make us unique among young professionals.
In fact, many of our friends are finding ways to balance a $900/month mortgage payment with a $1000/month joint student loan payment, most of which is paying off interest.
When I interviewed to work for Senator Gillibrand’s Office, there were many factors that made the prospect attractive. The Senator is well respected among her constituents and colleagues, and her office has a reputation for assisting New Yorkers in cutting through bureaucratic red tape.
What made the job even more attractive was a recruitment tool that federal offices can use to attract talented individuals to jobs in public service.
The Federal Student Loan Repayment Program allows federal offices to repay small portions of federally insured loans in the employee’s name.
While I did not become eligible for the program until my second year working for Senator Gillibrand’s office, each month I am able to make a choice: pay the same amount to my loans as I did without the repayment program and pay the principal off more quickly, or pay less on my loan and put the money I save back into the local economy.
Programs like this work in the private sector as well. There are businesses in WNY that offer student loan repayment to attract and retain talented recent grads.
Anyone would appreciate a higher salary and hourly rate, but if your goal is to attract high-end young professionals, offering a student loan repayment program is an excellent option for regional businesses.
From the employee’s standpoint, knowing that your employer wants to help you pay off your loans earlier is incredibly engaging and motivating.
My challenge to young professionals: Ask your employer if they offer student loan repayment programs. Similarly, when you are interviewing for a job, ask the interviewer if the company offers programs like this. The more candidates we have asking about these programs, the more likely it is that regional companies will make them a priority.
My challenge to employers: Talk to your employees about their student loan debt. Most importantly, consider offering student loan repayment programs to your employees.
It is repayment (and similar types of) programs that encourage home ownership and local spending.
About the author: Jim Kennedy is the Western New York Regional Director for the Office of Senator Kirsten Gillibrand. Jim serves on the organizing committee for the American Cancer Society’s Relay for Life of the Tonawandas and the Junior Achievement of WNY Young Professionals Board.