What this means for your employees, and how nonprofits are helping close the education access gap.
On August 24, the Biden administration announced plans to forgive $20,000 of student loan debt for Pell grant recipients and $10,000 for single borrowers earning less than $125,000, or $250,000 for joint filers and heads of household.
For up to 43 million Americans, this comes as major relief from the second-leading source of debt (behind mortgages). However, nonprofit and community leaders have been quick to point out that the crisis is far from solved.
“Though cancellation, extending the payment pause to the end of the year, and the announcement of a new income-driven repayment plan are the correct decisions,” said Denise Forte, interim CEO of The Education Trust, “it must be said that limiting the relief to these amounts represents a missed opportunity to do more to close the racial wealth gap, alleviate default rates, and prevent millions more borrowers from being burdened with decades-long debt payments that they are unlikely to ever pay off.”
Despite holding two-thirds of the nearly $1.6 trillion outstanding total, due to the wage gap, women are far less likely than men to pay down their debt. The news is even worse for African American students and grads, who are disproportionately likely to “borrow, borrow more, and…struggle with repayment than their peers.”
As New York University anthropologist Caitlin Zaloom wrote in her 2019 book Indebted:
The rising generation will need to confront these unequal histories as well as the prejudices of the economic systems that have generated and sustained them. College is not only essential for developing and transmitting knowledge about these problems. It’s also one of the few places where young adults can come together and teach each other ways to change the world.
[...] In the domain of education, the right to the future requires new solutions to the problem of paying for college, ones that honor families’ commitments to young adults’ open futures.
WHAT DOES THIS MEAN FOR YOUR EMPLOYEES?
If we accept some responsibility for the health and wellbeing of our employees—and in the Deed community, we do—then we shouldn’t ignore the financial, mental, and physical health impacts of the student debt crisis.
Let’s think about purpose the way we think about career. Sixty-three percent of employees are looking for their employers to provide more opportunities for purpose in their day-to-day work. Our employees devote the majority of their time to their respective projects, and they work hard to meet the ebb and flow of our companies’ fluctuating needs. It’s important to give them the freedom to spend sufficient time on the work they care about most, so that together we can align their career with our needs.
In the same way, purpose-driven companies are seeing 30 percent greater innovation, and employees are seeing two-to-five times greater work and life outcomes when they feel their purpose is fulfilled by their work. By looking for opportunities to align purpose and work, we can take a more comprehensive and realistic view of our peoples’ needs.
Leadership and corporate social responsibility (CSR) teams can work together on this. Their desire for purpose and need for debt relief can be met in tandem with creative ideas and strong corporate governance. We encourage companies to strive for an intersectional approach that looks at the whole employee.
TWO WAYS YOU CAN HELP
Fortunately, there are more nonprofits and social impact platforms available today for companies to explore partnering with to help their employees through the student debt crisis.
Shared Harvest Fund will pay down student loan debt to thank people for volunteering in their neighborhood. They offer “opportunities to improve the mental health of borrowers and promote loan forgiveness in a unique way that doesn't displace resources from communities in need, but rather enhances human resource capital and professional development.” Donate to Shared Harvest Fund now >>
Additionally, through its much-needed research, organizing, and advocacy, The Education Trust is a nonprofit “providing practical assistance in their efforts to transform schools and colleges into institutions that serve all students well.” Donate to The Education Trust now >>
However, the struggle for equity doesn't end with loan forgiveness—we also need to ensure the next generation has broader access to more inclusive and effective schools. At Deed, we believe that our community can lead the charge to break down social and economic barriers to entry into education. Our "Cause of the Month" is Education this August, and in our toolkit, you will find:
Deed offers more than a powerful CSR platform—we are your partner through the student debt crisis and the world’s most pressing issues. Reach out now for your copy of our “Cause of the Month: Education” toolkit and to join our global movement to do well in business by doing good for the world.