Thomas Sullivan’s book, COLLEGE…WITHOUT THE EXCESSIVE DEBT, paints a grim reality. Students on average graduate with between 30K—35K in debt (Sullivan 2019:4). That’s a haunting statistic. His very short book provides a great blueprint for how students can avoid loans (for the most part if not altogether). Students continually using scholarship search engines to find funds definitely is a must. For employers seeking the best talent from each new crop of college graduates, this loan debt crisis offers an avenue for hiring the best of the best while holding salaries in check.
First things first, I think employers should be paying good salaries, and I have found most try to provide the best pay/resources for their employees. Yet, competition for top graduates is tough, and everyone wants to hire the next star in their field. How do student loans play into this?
If it’s hard to compete with what another company is offering for your top prospect(s), consider offering to repay a percentage of a new graduate’s loan debt, say 25% to 33%, after completion of 3-5 years at the company. In doing so, you lock in talent for a good number of years while having time to gather funds to pay this prospect her/his signing bonus as it were. Now, let’s flip the switch. How do new grads use their student loan debt to their advantage?
New college graduates will likely find it difficult to compete for jobs and negotiate for a large salary right out of college. Or, in the case a new grad works for a company for 1-3 years, if he/she looks to ask for a raise, it might be hard to get the leverage to negotiate for top dollar salaries. Consider asking an employer to assist with loan debt. Asking for 25% to 30% for a set amount of years of service to the company (say 3) might be something a company will consider. Sure, it’s causing a delay in the salary boost. However, if a company pays for a part of a new grad’s loan debt, think of the interest save in the long-term.
For college students, I suggest you review Sullivan’s tips for reducing the amount of loans you need to take for college expenses. For those with debt already built, see about negotiating with employers and recruiters to include loan assistance in your benefits package. Doing so could get you out of loan debt sooner thereby reducing interest paid over time.