What to know about the student loan relief plan? Gen Z and Millennials won't be taking a backseat

Americans currently hold more than $1.7 trillion in student loan debt, spanning across generations. However, Gen Z and millennials have been the loudest voices on how student loan debt has derailed their lives: 74% of Gen Z and 68% of millennials say it’s prevented them from making big financial decisions. That ranges from putting money away for retirement, saving for emergencies, buying a house – and even having children.

 

While financial experts are still debating about the loan forgiveness plan’s impact on the economy, it's signaling a major change that’s been happening in the American population and workforce: Gen Z and millennials are becoming a force that needs to be taken seriously.

What’s in the student loan forgiveness plan?

The Student Loan Debt Relief Plan is made up of three parts. The biggest headline though is loan forgiveness. Those making less than $125,000 a year (or $225,000 for households) will be eligible for up to $10,000 in debt cancellation for their federal loans. Those who received Pell Grants, which are awarded to undergrad students who show financial need, could have up to $20,000 forgiven.  

In addition, the Student Loan Debt Relief Plan will make it easier – for a limited amount of time – for borrowers to get their loans forgiven through the Public Service Loan Forgiveness program. This program is open to those working for nonprofits, the military, or the government for 10 years to have all of their student loans cancelled.

The new plan will also extend the pause on federal student loan payments, which began at the start of the COVID-19 pandemic, through December 31 of this year. Lastly, the relief plan will also change the income-based repayment plan for undergraduate loans. Borrowers can now cap their payments at 5% of their discretionary income. Previously, it was 10%.

Take notice of millennials and Gen Z

More than half of the national total population are millennials, Gen Z, or younger. And in under a decade, millennials alone will make up 75% of the workforce. They’re making their presence known in the culture, at the polls – and yes, in the workplace. The student loan forgiveness plan is another example that younger generations are getting more comfortable demanding what they want, and it’s becoming more and more inevitable that the employers, who dismiss their priorities or assume they’ll eventually “grow up,” might see themselves left behind. But what are millennials and Gen Z asking for?

Committing to social causes

What’s your organization’s commitment to going green? More than 40% of Gen Z and millennials are pressuring their employers to make changes to fight climate change. What about income inequality or diversity and inclusion? Is your organization having a net positive or negative impact in the larger world? If you think it doesn’t matter, you might need to reconsider. One study found that 2 in 5 Gen Zers and millennials have declined a job opportunity because it didn’t align with their values, so now might be the time to reevaluate your organization’s policies and bigger purpose.

Finding work/life balance

Younger workers are signaling that they’re done with “hustling.” The disruption caused by COVID-19 and the cultural shift from the Great Resignation has left many younger workers rethinking their commitment to “the grind.” Almost half of Gen Z and almost 40% of millennials say they’re stressed most or all of the time. To help, employers can start by embracing hybrid work schedules and taking steps to prevent overworking.

Making connections

Since the start of the pandemic, younger workers are reporting being the most stressed and isolated from working remotely full time. Mentorship and cross training are critical programs for employers to adopt. They allow millennial and Gen Z employees to not just build relationships with more experienced workers, but to also start exploring what their own career path could look like. (One study finds that 86% of young people say that it’s important their supervisors give them opportunities to grow.)

Dropping employer loyalty

Job hopping is the norm for millennials and Gen Z. On average, Gen Z spends a little over two years in job, and millennials only stay for 6 months longer than that. Gone are the days of expecting job candidates who have resumes with long stays at the same company. Instead, younger workers are using job hopping as a way to advance their careers (and salaries) quickly. This means it’s important for employers adopt strong retention policies and to understand that the old measures of a strong candidate profile may no longer apply.

Adecco is here to help

When asked about why they left jobs in the past two years, Gen Z and millennials pointed to low pay, the impact their job had on their mental health, and burnout. For employers, that means it’s time to start making changes to your culture and your expectations.

With decades of experience in staffing, we’re more than equipped to help you make that change in your hiring process, onboarding, and retention strategies. We’ve developed successful HR solutions for businesses across the country, but to learn how we can support your team and its needs, contact us today.