The student debt crisis is “a significant—perhaps the most significant—consumer finance issue threatening our nation at this time,” says former Consumer Financial Protection Bureau student loan ombudsman Seth Frotman, including “breakdowns and harmful practices that we would simply never permit in other markets.”
In our new white paper, The Student Loan Crisis: A High Leverage Moment for Designing and Facilitating Employer Engagement in Student Loan Debt Assistance, we explore the critical role employers can play in alleviating the crisis by offering personal financial coaching in combination with programs like Loan Repayment Assistance Programs (LRAPs) to reduce workers’ student loan burdens.
45 million borrowers collectively owe $1.7 trillion in student loans, creating an innately inequitable crisis weighing particularly on women, people of color, the LGBTQ+ community and young workers.
For those burdened with student loan debt, building equity through homeownership feels out of reach despite it being the primary way the vast majority of workers in the U.S. build wealth.
Workers are forgoing career aspirations, family goals, financial independence, and future studies in the name of servicing student loan debts. It’s an unsustainable situation that hampers worker productivity, our economy, and millions of personal dreams.
Neighborhood Trust’s rich financial health data and coaching insights drawn from over 10,000 financial coaching sessions annually have contributed to our understanding of the problem’s scope and potential solutions. With this perspective, we aim to influence employer practices and benefits offerings, as well as advocate for innovation and collaboration across stakeholders in the student debt landscape, as part of an “all-hands-on deck” approach.