Problem:
Can credit unions position themselves as an employer of choice by helping current and potential employees cut their student loan repayment time in half?
Solution:
Life After Debt, a two-pronged approach to slashing student loan debt. First, credit unions employees could elect to allocate a portion, or all, of their traditional retirement benefits to a 401(k)-like student loan plan. The second feature of Life After Debt is a student loan refinance program that allows employees to refinance their student loans at low or no interest to ensure their payments are going to reduce debt, rather than simply paying accrued interest each month.
Testing Results:
We surveyed 85 people with student loan debt to understand whether they would value this option as a substitute to a more traditional benefit plan. Of the 85 respondents, 69% had student loan debt under $50,000 and the other 31% had outstanding loans above that amount. Additionally, 66% of the respondents said they were either somewhat worried or very worried about their student loan debt.
Despite holding significant amounts of student loan debt and two-thirds of the group expressing concern with their debt loads, only 42% said they would elect to receive the student loan debt assistance instead of a traditional 401(k) contribution. These responses were surprising, as they contradict previous surveys indicating that student loan debt is a driving force of life choices for many in today’s workforce.