Gift of College, an innovative platform that facilitates crowdfunding for college, today announced the results of its “Paying for College Survey.” The national survey covered an array of topics from student loan debt and saving and paying for college to the emotional toll of student loan debt and the impact of employers helping to save for college or pay down debt.
An overwhelming majority (75%) say employers should help pay for college and/or pay down student loans and more than 53% of people think it would be helpful for their employer to provide payroll deduction for 529 plans.
“Families are struggling and looking for savings solutions that don’t saddle them with debt. Workplaces have stepped in to offer a range of benefits for employees, and it seems logical for them to provide programs that support employees trying to save and pay for college. 5/29 Day is an ideal time to shine light on the valuable role employers can play,” said Wayne Weber, CEO and founder, Gift of College. “Student loan debt in the U.S. is topping nearly $1.6 trillion—and the time to put an end to this vicious cycle is now. The best way to end the borrowing is to prepare in advance by saving with 529 plans—but increased awareness is crucial, as our survey showed 64% of Americans are unfamiliar with 529 plans.”
Among the survey’s additional findings:
• COVID-19 Relief: 67% of Americans report they are unaware of the student loan debt provisions provided in the CARES Act which could be valuable to those saddled with student loans. The bill opens avenues for employers to provide for the first time tax-free student loan benefits to employees through year-end under IRS 127 Educational Assistance Programs. Additionally, the legislation suspends payments and waives interest on federally-held student loans through September which makes the impact of employer contributions even more valuable at this time.
• Employees’ Preferred Benefits: 75% rank 529 college savings & student loan benefits amongst the top three desired employer benefits overall (13% rank it as most important, and 23% of which rank it second only to health benefits).
• Side Effects of Student Loans: Of those who have student loan debt, 62% feel overwhelmed by the amount of student debt they are facing. Additionally, 42% of respondents say student loans create feelings of stress, and 12% report this stress interferes with their ability to focus at work. Plus, 27% report their student loan debt interferes with their ability to make a major purchase, and another 27% report it interferes with their ability to save for retirement. More than half (51%) of respondents say they are facing student loan debt for themselves or a loved one, and 21% owe over $51,000 in student loans.
• Increase in Employee Satisfaction: If employers offered 529 savings contributions, 29% of respondents say they would stay at their job, 24% say they would take a job, and 18% say they would go the extra mile at work. Likewise, if employers offered student loan assistance, 34% say they would be more likely to stay at their job, 33% say they would be more likely to take the job, 22% say they would be more likely to work go the extra mile at work.
• Automating Contributions: Of those who have 529 plans, 44% contribute automatically through their checking or savings accounts, and only 22% contribute through automatic payroll deductions at work. Research from ISS Market Intelligence shows those who save through payroll deduction (versus automated savings from a bank account) save on average 75% more.
• College Savings Trends: When asked about methods they currently use, plan to use, or have used to pay for higher education, respondents say student loans (42%), personal savings (39%), financial aid (37%), scholarship (36%), 529 plans (11%), and tuition reimbursement plans through work (10%).