As an entrepreneur, I love hearing about new business models – what are they offering, how are they structured, what is their go to market strategy, and what problem are the solving. To be honest, it is that last question that intrigues me the most as I have a belief that great businesses are anchored on identifying a societal problem or a gap in an underserved market and bringing something to bear that solves that problem and fills that gap. Given the above, I was more than a little intrigued when a colleague brought to my attention a business that he recently founded that directly addresses the growing student loan debt problem in the US. Actually, according to several sources (including our US Presidential candidates), the problem is more than a problem – it is on the verge of becoming a full-fledged crisis. Here are a few statistics that shine a light on this growing problem… – The total outstanding student loan debt in the U.S. is $1.2 trillion (that’s TRILLION with a T), that’s the second-highest level of consumer debt behind only mortgages. Most of that is loans held by the federal government. – About 40 million Americans hold student loans and about 70% of bachelor’s degree recipients graduate with debt. – The class of 2015 graduated with $35,051 in student debt on average, the most in history. – One in four student loan borrowers are either in delinquency or default on their student loans. You may be asking yourself, as a benefits professional, while this information is interesting, how does it professionally affect me? The answer becomes much clearer when you take into consideration the two following statistics: 1) the median tenure for a millennial employee is just two years, compared to seven years for a baby boomer; and 2) 30 percent of companies lose 15 percent or more of their millennial workers within a year. While this additional information may not make your own heart skip a beat, trust me when I say that it does hit your clients squarely between the eyes. Your clients are challenged by trying to find and retain the best talent possible and when that potential talent is saddled with $35,000+ debt and an idea that they won’t stick at any one employer for more than 2 years, they are looking for any possible solution to stem that tide. This perfect storm of high student loan debt, low employee tenure, and the need for talent retention is a problem in need of a solution. And, as your client’s trusted advisor, you would do well to consider being the one to research and identify potential solutions. I’ve come across two possible solutions in recent months and given the growing need/problem, my hunch is that others will step in to help fill this gap. You may want to read these articles to begin to wrap your heads around this problem and understand how you might be able to consult with your clients to help them address this growing problem. http://www.chicagotribune.com/bluesky/originals/ct-1871-peanut-butter-student-loan-repayment-bsi-20160217-story.html http://www.employeebenefitadviser.com/news/is-student-debt-the-next-area-of-benefits-innovation As a benefits professional, one of your primary objectives is to help your clients produce a benefit program that attracts and retains the best talent so that that organization can grow and flourish. It may be time for us to think outside of the box, look beyond traditional benefit offerings, and bring to the table unique value and consultation. Trust me, your clients will thank you for it and will further cement you in the role as their trusted advisor.
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