With October 1 — the date for student loan repayments to restart — right around the corner, members of the class of 2024 are already deciding their career paths around financing loan payments.Handshake Chief Education Strategy Officer Christina Cruzvergara joins Yahoo Finance Live to break down how various industries are offering younger workers benefits packages to help pay off student loan debt.“Different organizations are structuring it differently,” Cruzvergara explains. “For some, it's about, once you've given a certain number of years and investment in the company, they are willing to… start paying a portion of your student loan.”
AKIKO FUJITA: Well, student loan payments are set to resume October 1. The class of 2024 won't get the buffer that pandemic-era graduates received. Many of them will have to start making payments six months after graduation.
According to a recent Handshake survey, nearly 60% of students expect to graduate with student debt. Of those respondents, nearly 70% say their loans will influence what job they take after graduation. Fortunately for them, more and more companies are taking this into consideration. As part of our week-long special Student Loan-- Smarter Strategies, we're going to be discussing how business plans to help student loan borrowers is Christine Cruzvergara, Handshake Chief Education Strategy Officer.
It's good to talk to you today. Let's talk about how companies are thinking about this first of all. It feels like this is becoming increasingly part of the benefits package. What are you hearing from companies on how they're structuring this with the understanding that employees coming in are shouldering that load?
CHRISTINE CRUZVERGARA: Yeah. This is a really big concern. And for the graduating class, they want to know that they have employers that care holistically about what this is going to look like for them. So just in the past year, we have seen the number of companies that have mentioned student loan repayment double on Handshake. And that's going to go a long way to attracting a lot of the recent graduates into their companies.
SEANA SMITH: Yeah. Christine, how much do you see this potentially influencing the job search? How big-- how much of a priority is it here for these recent graduates?
CHRISTINE CRUZVERGARA: Well, financial stability is the primary factor that the class of 2024 is really looking at as they think about where they want to go, how they want to start their career. So student loan repayment is a big piece of that. As we know, many of the students that are graduating are going to have loans upwards of sometimes over $1,000 a month. For an entry level grad, that's a huge chunk of their paycheck.
And so this is going to be a really big piece that will factor into their decision making. I think, again, you all mentioned at the beginning of the segment, 70% of those that are graduating with student loan debt say that this is going to influence the way that they think about their job choices and what companies they choose to go to.
AKIKO FUJITA: So how are companies responding to this? I mean, is it structured similar to like a 401(k), where the companies are asking employees, look, how much is it that you have to pay, we can pay an X amount in relation to that?
CHRISTINE CRUZVERGARA: It really varies company to company. So different organizations are structuring it differently. For some, it's about, once you've given a certain number of years and investment in the company, they are willing to pay-- start paying a portion of your student loan. For others, if you've spent a certain amount of time, they'll help pay off whatever remaining debt you might have. For some, it's a little bit more like a matching sort of like a 401(k). So it really varies depending on the organization and the company.
SEANA SMITH: Christine, the companies that are offering this, are you seeing any trends in terms of sectors, industries, some that are more likely to give this offering or have this offering versus others?
CHRISTINE CRUZVERGARA: Sure. From our data, what we're seeing is actually that health companies are rising to the top and mentioning student loan repayment more in their job descriptions. They come in at the very top of the list. You've got nonprofits that are coming in right after them, government coming in third. Financial services, not surprisingly, is fourth and. Then education kind of rounding out the top five. So those are the five main industries that we're hearing from the most.
Now that being said, my own personal experience is actually working with travelers insurance back when I was actually working in higher education and supporting students in their career journey, they were very early to the game in offering something like student loan repayment as a way to make insurance a more attractive industry for a lot of early graduates. As you can imagine, most students don't graduate from school thinking, I really want to work in insurance. So we saw some early partners that were thinking about this a long time ago. And now, they have a lot of other colleagues that are catching up to that game.
AKIKO FUJITA: Christine, you mentioned that more and more companies are offering this benefit. I wonder how much of this is in response to what has been a tighter labor market that employees have the leverage to ask for this, how much of this do you think is just kind of where the trend is going? This is going to become the norm, sort of like just getting health care.
CHRISTINE CRUZVERGARA: I do think it's going to become the norm. I also think one of the things that employers are really wising up to is that Gen Z, the newest generation of workers that are coming into the workforce, they care a lot about well-being. They care a lot about the holistic person that is coming to work. And I think the pandemic played a really big role in that.
So what we're hearing from a lot of employers and from a lot of students are questions about mental health, about well-being. And student loan repayment is part of that conversation as they think about their financial well-being. So all of these types of benefits are becoming more the norm as a new generation comes into the workforce.
SEANA SMITH: Christine, is this just being offered to entry-level positions, entry-level employees? Or is this type of offering here available to maybe those who have been out of school for 5, 10, 15 years?
CHRISTINE CRUZVERGARA: For most of the companies, it's for anyone that has student loan repayment. So it would work for older and more seasoned workers that have been there for a few years in addition to the early talent that is coming in right now.
AKIKO FUJITA: That's interesting to see more and more companies moving in this direction. Christine Cruzvergara, Handshake Chief Education Strategy Officer, good to talk to you today.
