Most of us living in this country have all been taught the key to a fruitful life is education, and that pursuing college or secondary education after high school is imperative – even if it means student loan debt.
Unfortunately, overwhelming student debt is crippling the life choices of millions of people in the United States today, and there are few viable options for their debt relief.
Being one who chose to attend college, I am grateful that during my 20+ career I have been fortunate to celebrate milestones of life such as buying my first new car, getting married, owning my first home and having children without the burden of student debt.
Most recently, however, I find myself reading more and more stories about the soaring costs of higher education. Consequently, a growing number of people in the United States are being saddled with student loan debt that is either delaying or preventing them from achieving their milestones in life. My heart breaks for those who have decided to delay or forgo marriage, children or buying a home because of crippling student loan debt.
Here are some eye-opening facts from the U.S. Department of Education and U.S. Census Bureau:
- 44.7 million persons in the United States have outstanding student loans (one in four between the ages of 18-65).
- An astounding 70 percent of all college graduates are leaving school with an average of $30,000 in debt.
- U.S. student loan debt has eclipsed $1.5 trillion and is second only to home mortgage in dollars owed, outpacing automobile and credit card debt!
Employers in today’s tough and competitive recruitment market are increasingly pressed to attract and retain top people by offering attractive workplace culture, flexible hours, remote working., etc., along with traditional benefits. Financial wellness, however, has emerged as a key benefit area as employers realize the impact student loan debt has on their employees’ lives.
Employer Assistance is Limited
There are three main ways an employer can assist an employee with student loan debt:
Employer contribution platforms – Employer contribution or 401k diversion platforms are nice, but they can be expensive for the employer.
Refinancing options – While a well-known option, refinancing a loan should be the last choice for several reasons. First, qualifying for a student loan refinance is difficult. Statistically speaking, only 10% of people living in the United States have the credit to qualify for an unsecured refinance of a student loan. Secondly, refinancing only decreases the total loan costs by 8%-15% over the life of the loan.
Most importantly, however, when borrowers privately refinance their Federal student loans, they automatically lose access to all the Federal programs that have been enacted to offset student loan debt.
Leveraging Federal programs – Eighty-two percent of student loans are federal government loans. The first step any person with student loan debt should take is to identify, maximize and enroll in free Federal programs designed to reduce the burden of student loan debt for different populations of people.
Public Sector Loan Forgiveness
Unknown to most borrowers, there are more than 70 Federal programs that will offset or subsidize a Federal student loan payment. These programs can save borrowers an average of 65 percent off their loan payments with no negative adjustment to rate or term.
Shockingly, only 4 percent of student loan holders apply for these programs. Those who do are discouraged by their applications being rejected without reason. One of these programs, the Public Sector Loan Forgiveness program, approved only 206 of 41,000 applicants in 2018! In other cases, public sector workers have filed suit, as they were told they enrolled in said programs, but later discovered they were not.
Get Help for Employees with GotZoom
To address this growing problem, companies like GotZoom, based in Lenexa, KS, are helping borrowers navigate Federal programs as an employer-offered financial wellness benefit.
GotZoom helps employees (and their family members) with student loan debt to 1) identify what programs they qualify for, 2) maximize their benefit from the program, 3) enroll them in the program(s) with guaranteed acceptance, and 4) recertify the employee on an annual basis, as required.
The Federal programs are for both public and private sector employees. Public sector employees, such as K-12 districts, however, can potentially qualify for the 70+ subsidies and the Public Sector Loan Forgiveness program, which voids the balance of the loan after 120 on-time payments.
GotZoom does not charge the employer or the employee to help them identify programs for which they qualify. The only time a charge is solicited is when the employee decides to enlist GotZoom’s assistance. GotZoom specializes in preparing the documents to enroll and recertifies your employees into the programs for which they qualify. (Beware of similar services that require payment upfront. They are most likely a scam. More about loan relief scams in the next GotZoom blog.)
Thanks to companies like GotZoom, persons overwhelmed by student debt can be equipped with the information and tools they need to pay off their loan debt easier and faster. Hopefully, they won’t have to delay buying a car, getting married, starting a family, buying a house, and saving for the future—in other words, living the American dream!
To learn more about GotZoom and to get started, visit: psst.com/gotzoom.