WHY COLLEGE TUITION IS AN EMPLOYER PROBLEM. College Debt is Killing Productivity: Here s How Employers Can Fix It

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1 WHY COLLEGE TUITION IS AN EMPLOYER PROBLEM College Debt is Killing Productivity: Here s How Employers Can Fix It

2 FINANCIAL WELLNESS AT RISK Today s college students are graduating with an average of $37,000 1 in debt. The collective tally grows at nearly $3,000 every second 2. It s one of today s largest factors in financial wellness. And it s killing productivity at every level of the workforce. 70% of managers say personal financial challenges impact employee performance 3

3 LOSS OF WORK HOURS Employees can t focus at work because of debt. The future benefits of a college degree (higher pay, lower unemployment) fuel parents race to afford tuition, leading working mothers and fathers to spend hours and hours trying to cobble together a financial plan for their children Parents spend an average of two hours at work each week researching college-related information 4 1 in 4 spend up to 25% of their work week 4

4 30% said student debt has caused them to resort to more frequent job-hopping LOSS OF COMPANY LOYALTY New graduates are entering the workforce with crushing payments that are gobbling up starting salaries. As a result, employees are job hopping and foregoing specialized fields (that employers need) in order to pay off debts they took out years earlier 5. 50% 49% 58% say student debt has limited their career choices said debt prevented them from pursuing a specialized field when additional school is needed feel the need to get higher paying jobs to pay off their debts

5 LOSS OF ENGAGEMENT The number of people over age 60 with student debt has exploded, growing 300% from 2005 to faster than for any other age group. As a result, people can t retire because of debt. Just as Millennials may choose their first job based on income rather than passion, established boomers may linger in a position for the cash flow, rather than a genuine commitment to the job. 78% say student debt has affected their ability to save for retirement5

6 LOAN REPAYMENT IS THE FOCAL POINT What no one ever talks about is...why? Why do people take on so much debt? The answer is because they don t see any alternatives. College is the goal, and loan rules are notoriously complex. The result is people blindly assembling loans from multiple private providers without fully considering the future payments and long-term costs. Yet three-quarters of people paying educational debt call it a focal point of their lives, impacting them every single day 5. 45% have no idea what interest rate they re paying 39% have three or more outstanding loans 84% are completely overwhelmed by the thought of refinancing

7 WHAT S THE ANSWER? Productivity is suffering. Today s working parents need facts about wise loan decisions and how to borrow; today s indebted need guidance on consolidating debt and making payments manageable; today s young parents need advice on how to save to be ready for tomorrow s tuition. Concrete advice on loan terms, future payment amounts, and even how to negotiate with colleges for financial aid would help employees get a solid handle on both borrowing and paying back debt. It s a surprisingly easy answer. And employers who provide it will get back lost productivity, loyalty, and engagement today, tomorrow, and in the future.

8 Nearly 100 organizations nationwide look to College Coach, a Bright Horizons solution at work, for unrivaled expertise in educational advising for children of all ages and abilities. Expert-led workshops, personalized assistance, and online resources assist employees with their children s educational goals, from school-age study skills, to resources for special needs students, to saving, paying, and applying for college. With our team of former admissions officers, college finance professionals, and teachers, College Coach provides concrete advice that maximizes confidence and minimizes stress, resulting in employees who are more loyal, focused, engaged, and productive. ENDNOTES 1 Student Debt Is About to Set Another Record, But the Picture Isn t All Bad, Josh Mitchell, WSJ.com, May 2, Watch America s student-loan debt grow $2,726 every second, Jillian Berman, Marketwatch.com, January 30, Financial Wellness in the Workplace, SHRM, May Lasting Impact of College Coach, Bright Horizons, Generating Interest; College Debt s Toll on American Workers, EdAssist, Baby boomers and student debt the problem no one is talking about, Jillian Berman, Marketwatch.com, January 10, 2017 Contact us to learn more clientservices@brighthorizons.com brighthorizons.com/solutionsatwork Follow 2017 Bright Horizons Family Solutions LLC. All Rights Reserved