PRODUCTS & INNOVATION
GOT STUDENT DEBT?
WE'VE GOT YOU
An Abbott-YouGov survey showed 9 out of 10 college students with education debt want to work for a company with a student loans perk.
May 15 2019
Abbott recently partnered with the global research firm YouGov to get a better picture of how student loans are impacting people's job choices and retirement savings.
While we knew student loan debt was a very big deal for our employees, we wanted to hear from current college students and workers outside of our company.
What we learned is 9 out of 10 college students with student loans are looking for a company with a student loan perk. Additionally, 6 in 10 working adults with student loans would consider switching companies to gain a student debt employee benefit.
"We had listened to our own employees and recruits in the U.S., but we were interested in hearing what people outside of Abbott with student loans were thinking," said Abbott Executive Vice President of Human Resources Steve Fussell. "What we learned was this issue matters more than we even knew."
The survey of almost 2,600 U.S. adults also revealed:
• 64% of all adults with student loans say finding a company that offers a student loan benefit is important
• 42% of adults with student loans aren't saving for retirement due to their student loans, including almost half of people with student debt ages 18-34 and over a third of those 55 or older
• 70% of Black and 76% of Hispanic Americans with student loan debt say finding an employer with a student debt employee benefit is important – almost half of each group say it's "very important"
Abbott's Freedom 2 Save program enables Abbott employees with student loans to divert the 2% minimum contribution they'd normally have to contribute to their 401(k)s to receive a 5% match to pay off their loans faster. When they show that they're using at least 2% of their eligible pay to whittle down loans, the company kicks in with a 5% contribution to their 401(k) accounts – without them having to contribute a dime.
Employees with $40,000 in debt would pay off their loans, on average, 3 years sooner. If they used Freedom 2 Save for 10 years, with a starting salary of $70,000 (and 3% annual merit increases and 6% market return), they would also accumulate about $54,000 into their 401(k) accounts, without making any contribution of their own.
About 4% of companies today offer a cash reward to help employees with student loans today – and one-third of employers are expected to follow suit by 2021. Abbott found its structure to be more valuable for employees in the long run because the investment is worth more over time, as it grows tax-deferred; it is not taxed immediately as cash rewards are; and there are no strings attached – no waiting period and no cap to the amount of the contribution.
To learn more about benefits at Abbott, visit our Benefits Website.
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