I was born in Peru. Not long after, my father had the opportunity to enroll in the University of Utah for his master’s degree and PhD. So, 40 years ago, we sold just about everything we owned, packed the rest into a handful of leather poufs, and headed to the United States to begin our new life. To make ends meet, my dad worked as a teaching assistant and moonlighted at a pizza parlor, while my mom babysat neighborhood kids. He graduated in four years and needed $3,000 in student loans to do so.
When it was my turn for college, I earned a full ride to Carnegie Mellon University and graduated without any student loan debt. But then I returned to school for my MBA at Duke University’s Fuqua School of Business; I was drawn to the school’s Center for Social Entrepreneurship, which was founded on the idea that businesspeople can drive social change through their work. My husband was teaching at the time, so being able to afford graduate school required student loans. By the time I graduated, I was six months pregnant and $120,000 in debt, spanning 10 loans.
It’s depressing how much money it now takes to obtain undergrad and graduate degrees, both of which have become baseline requirements for most well-paying jobs. As a Latina, I felt firsthand the need to have a great education to have a fighting chance for the best jobs in my field. I know I’m not the only woman who feels that way; women account for $890 billion of today’s total $1.5 trillion student loan debt. Unfortunately, nearly a million student loan borrowers default every year, and 40 percent of borrowers are expected to be in default within the next five years. I’m one of the lucky ones—I’ve been able to make timely loan payments all these years. But it would be easy for an unexpected life event to suddenly throw my payment schedule way off track. Student loans may have made my life possible, but that doesn’t mean I should accept a lifetime of debt.
Since 2015, I have been a fellow with the Aspen Institute First Movers Fellowship Program, the global network and professional development program for corporate socialintrapreneurs. I’ve relied on the knowledge and expertise of the First Movers network to help me align business objectives with improving Americans’ financial wellness, with a particular focus on the challenges faced by women and minorities.
I’m an idealist at heart. I became the chief operating officer at Vault, a company dedicated to creating work cultures that help solve their employees’ financial hardships, because I believe that making career choices that align with your passions and interests lead to the best-lived lives. My First Movers peers are also a testament to this belief. When it comes to the choice of school or career, the focus shouldn’t be entirely on the price tag or return on investment. But it’s still critically important— especially for young people who are just starting out and facing the prospect of debt for the first time—to understand how that debt can and will impact their lives after graduating.
Employers need to understand that impact as well. Given that 44 million Americans have student loans, companies looking to retain and recruit diverse talent should consider the following action steps to modernize their benefits:
REPAY LOANS. Health care and 401(k)s are table stakes. Beyond that, the most demanded benefit is student loan repayment assistance.
MEET DEMAND. Only 4 percent of US companies offer a student loan repayment benefit today. Thus, the human resources marketplace is lagging well behind consumer—meaning employee—demand.
BE EARLY. The corporate winners for talent will be the early adopters of student loan benefits. Companies that reallocate benefit dollars to the best and highest use—one directly aligned with the realities and stressors faced by the modern workforce—will benefit as much as the employees.
MODERNIZE BENEFITS. Student loans are not an outlier issue. Not only has the cost of higher education skyrocketed, we live in an on-demand economy in which workers are not seeking lifetime employment with one firm. This means most existing playbooks for employee benefits that drive recruitment, retention, and company culture are outdated.
As someone whose American dream was made possible by taking on student debt (I’m in my 40s and still paying them off), my mission is to help show hard-working people, especially women and people of color, the way forward. To do so, Americans must be able to get a quality education without burying themselves in a lifetime of debt. As student loan debt continues to grow to crisis proportions, the need for marketbased, work-incentive solutions for tackling loan repayment for millions of Americans will only become more paramount.
This is not a problem that has a single, silver-bullet solution; it’s one that requires a combination of public and private initiatives to solve. My colleagues at Vault and I are determined to be leaders in the quest to solve it.