Source: Commonwealth Magazine
By Eileen M. Donoghue, Julie Lammers, and Paul Mark
As the student debt crisis worsens, elected officials are turning to college affordability as their primary policy solution. New York is implementing tuition-free public higher education through its Excelsior Scholarship, and our neighbors to the south are close to making two years of college free through the Rhode Island Promise Scholarship. Right here in Massachusetts, legislators are considering establishing a Finish Line Grant that would cover one year of tuition and fees at a public college or university.
Tuition-free college is great news for current and future students who can avoid taking out large loans, but what about the 44 million Americans who already hold more than $1.3 trillion in student debt? To fully address the crisis, we need solutions for the students of today, tomorrow, and yesterday. That’s why it’s refreshing to see Massachusetts lawmakers from both sides of the aisle support tax incentives to encourage employer participation in student loan repayment.
According to a December 2016 report by the Massachusetts Budget and Policy Center, the Commonwealth has cut higher education spending by 14 percent since the 2001 fiscal year, which translated into a 31 percent cut in spending per student. To no one’s surprise, tuition and fees rose as a result and many families turned to student loans to fill the gap. In fact, the 2014 report of the Joint Committee on Higher Education’s Subcommittee on Student Loan and Debt found that the amount of student loan debt for graduates of Massachusetts public colleges and universities had increased by 27 percent over the prior three years.
A recent survey conducted by American Student Assistance shows that workers aged 22 to 33 who have student debt are now feeling the squeeze. More than half reported worrying about repaying their student debt either, while 40 percent are concerned their student loans have impacted their health. Further, more than three out of five young workers say their priority is paying off student loans and not contributing to a 401(k) or other retirement plan, which could mean greater financial insecurity down the road.
Meanwhile, nearly 90 percent of young employees in the American Student Assistance survey say they would commit to a job for five years in return for help with their student loans—a fact not going unnoticed by employers. Recognizing that stress over student debt can lead to a loss of productivity in the workplace, more and more employers are offering to help reimburse employees for outstanding student loans—a benefit that doubles as a means to attract and retain young people, especially in states like Massachusetts with a high cost of living.