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Student debt is often seen as a "young person’s problem", associated with employees in their twenties who completed a four-year degree. Here's the surprising reality: about one-third of Americans who pursued education after high school have taken out student loans. It’s not just young professionals fresh out of four-year universities, this number includes older workers returning to school, parents who took on debt for their children’s education, and employees who never completed their degrees.
By underestimating how common student loan debt is, employers lose a valuable opportunity to support their workforce and improve retention.
Fact: Over one‑third of borrowers have debt but no degree
Here's a statistic that changes how employers should think about student loans:
Nearly 40% of undergraduates who started college in 2011 took out student loans but still didn’t have a degree six years later. These are individuals who have to repay their debt but may lack the earning power that comes with a certificate or diploma. Among students who started a bachelor’s degree program, those that dropped out are 95 times more likely to default on their student loans compared to those who completed their degrees.
The consequences of default are severe. Borrowers in default face negative credit reporting, collection fees, loss of Child Tax Credit payments and tax refunds, and beginning this fall, wage garnishment of up to 15% of their income. These collection actions not only strain employees financially, they create distracted and stressed workers who are more likely to leave for opportunities that offer higher compensation or to avoid wage garnishment.
Student debt spans all ages in the workforce
Many assume student debt only affects younger workers, but statistics tell a different story: The number of student loan holders who are under age 34 and those aged 35 and older are about equal. But the older group holds nearly two-thirds of all outstanding student debt.
This reveals several realities about today's educational landscape:
- People return to school throughout their careers. A 45-year-old shift supervisor might have recent debt from a nursing program she entered to advance her career. An experienced warehouse manager could be paying off loans for a business degree he tried to complete while working nights.
- Parents take on debt for their families. About 21% of workers expect to take out loans for a child or other family member's education in the next five years. The seasoned employee who's been with a company for a decade might be carrying fresh debt to help their teenager attend college.
- Life circumstances drive educational decisions. Among current students, millions of single mothers are balancing education with raising children, often attending school part-time while working full-time jobs to support their families.
Student debt isn’t a “young employee problem.” It’s a workforce-wide challenge that touches every age group, job level, and industry. In fact, some of your most experienced and reliable team members may be carrying the heaviest debt loads.
Why this matters for your business
Financial stress impacts more than employee well-being-- it directly affects retention, engagement, and productivity. Now that student loan repayments have resumed for the first time in five years, employees are suddenly feeling the weight of payments and may look to their employer to make up the costs. In fact, 86% of employees would stay with their employer for at least five years if the employer helped them pay back their student loans. Given this sudden change in employee finances and the vast number of employees affected, the time for employers to act is now.
The solution: Student loan assistance that actually works
While across-the-board salary increases may not be feasible, student loan assistance offers an equally powerful way to improve financial wellness, at a fraction of the cost.
Summer’s platform connects employees to existing federal programs they already qualify for, helping them unlock thousands of dollars in savings and reduce their monthly payments. We take care of the details — identifying eligibility, managing paperwork, and ensuring accuracy — so you can focus on your people. By building student loan assistance into their HR strategy, our partners have seen higher job satisfaction, lower turnover, and stronger recruitment appeal.
Student debt disproportionately affects employees who are the backbone of America's workforce. The good news is through Summer, employers can tap into a powerful retention and recruitment tool and offer the relief employees are seeking.
Ready to boost your workforce with student loan benefits from Summer? Contact us today.
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