Before policymakers consider how to solve the student debt problem, they should understand that today’s typical indebted college student is not like the student of the past. Not only are they deeper in debt but likely older as well, with children, and working full or part time as they study for a degree.
Still they need to borrow to pay tuition and other college costs, which has contributed to a student debt explosion.
According to the National Center for Education Statistics, almost 40% of students enrolled for the 2019-2020 academic year are 25 or older, and 57% are women.
There is currently over $1.5 trillion in student debt outstanding held by 44 million borrowers, averaging more than $30,000 per student.
The impact of the growing amount of student debt — now the second largest category of consumer debt after mortgages — “has created an entire generation of a permanent debtor class which impacts the rest of their lives and the broader U.S. economy, including companies — companies and culture,” says Dan Rosensweig, president and CEO of Chegg, a publicly traded company that provides an online educational platform.
Student loan borrowers are forced into jobs they don’t want; missing payments on other debt, including auto loans and credit card debt; delaying marriage, children and homebuying and, in many cases, suffering from depression and anxiety, says Rosensweig, who spoke at a recent webinar sponsored by the Aspen Institute: Unpacking $1.5 Trillion: The Real Impact of Student Loan Debt and How We Turn the Page.
“If the burden were reduced, think about the money that could go into the pockets for housing and retirement. It would be the biggest economic boon this country has ever seen.”
Help From Employers
With that in mind, Chegg has joined a growing number of companies that are helping employees pay off their student debt. Its Equity for Education program provides entry-level through manager-level employees with at least two years tenure at the company a $5,000 annual grant of company stock to help the employee pay off their student debt (employees at the director or vice president level are eligible for up to $3,000 annually).
Rosensweig is lobbying for legislative change so that the grants are not taxable for the employee and tax deductible for companies.