Offering student loan assistance can help Black employees

Student loan debt disproportionately impacts black borrowers. Here's how employers can help.

Mom snaps a selfie with daughter as they load the car trunk with college supplies.
The student loan crisis has highlighted the inequities in higher education — and the disproportionate impact student loan debt has on the Black community. Almost 85% of Black graduates with bachelor's degrees have student loans compared to 69% of white degree recipients.1  Black students are not only more likely to need loans to pay for higher education costs, but they also end up owing $7,400 more on average upon graduation.2
Obtaining a college degree is a crucial step toward increasing an individual's lifetime earning power. However, for Black students, the debt incurred along the way can delay the financial benefits of higher education. Research shows that student debt is fueling the black-white wealth gap, resulting in young Black adults holding 10% less wealth on average than their white peers.3
Fortunately, there are ways employers can help. Student loan assistance programs enable employees to reduce their debt, alleviate the related financial stress and improve their overall financial wellness. As an added benefit, they also provide a unique incentive for recruiting and retaining talent.

The burden of debt

U.S. borrowers carry more than $1.5 trillion in student loan debt, an amount that's second only to mortgage debt. In fact, one in eight Americans has a student loan. The motivation for borrowing money to earn a college degree is understandably strong: The Brookings Institute reports that college graduates earn $1 million more than individuals with only high school diplomas.4
Yet, for Black students pursuing a degree often comes with increased financial risk and ramifications. Higher education has become exponentially more expensive, currently increasing at eight times the rate of inflation. And Black families often have fewer financial resources to fuel higher education goals.
The average net worth of a Black family, for example, is $17,000, while the average net worth of white families is more than $171,000.5 With fewer assets to draw on, Black students often face the choice of incurring debt to make their higher education dreams a reality or forgoing their college plans altogether.

Exacerbating the wealth gap

Student loans become the means to the end, but they also further widen the wealth gap. Black college graduates have twice as much student debt as their white peers, due to compounding interest and a limited ability to pay the loans down. Of equal concern is that 21% of Black student loan holders default on their debt compared to 4% of white loan holders.6
The wealth gap that created the need for the debt in the first place contributes to that higher rate of defaults. However, additional research from Brookings reveals that higher enrollment by Black students into for-profit colleges—many of which rely on predatory loan practices—and Black graduates earning less than their white counterparts are also significant factors.7 The defaults create financial problems that extend past student loans, impacting consumer credit scores and making it more difficult to access affordable credit for other needs.
Higher education debt can still harm borrowers who are diligent about their student loan payments. Employees with student loan debt experience increased anxiety, which can negatively affect work performance and overall health. What's more, this debt can prevent borrowers from achieving other financial milestones such as purchasing a home or saving for retirement.
These missed milestones only exacerbate the black-white wealth difference. The student loan debt becomes an anchor, keeping Black borrowers from saving and building wealth to improve their overall financial security.

Employer support makes a difference

With student loan assistance programs, employers can help borrowers decrease their student debt and improve their financial wellness. For example, Voya's recent strategic relationship with Vault enables employers and plan sponsors to provide a range of student loan support, including:
  • Vault Advisor, which offers analysis and guidance on how to best deal with existing loans.
  • Vault Pay, which allows employers to pay down student loan debt for their employees directly.
  • Vault Match, which allows employers to optimize match contributions by making retirement plan contributions tied to employee student debt repayment.
Student loan debt assistance programs like Vault benefit everyone involved. Employees get the opportunity to reduce and eliminate their student loan debt, without sacrificing their other financial priorities. Employers, meanwhile, gain an added way to attract and retain talent. Voya's research reveals that employees between the ages of 18 and 44 are far more likely to choose an employer who offers such student loan benefits.8


For Voya, supporting underserved, undercapitalized, and undersaved communities is an essential part of our mission. In 2020 we launched the Just Right Advantage program, which empowers minority-owned small businesses with retirement plans that help their employees save and prepare.
Through our collaboration with Vault, we can work with employers to tackle the inequity caused by student loan debt and help pave the path to a brighter financial future for Black college graduates.
Learn more about how Voya's student loan debt solution can help your employees reduce their student debt, and improve your recruitment and retention along the way.



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Vault is a separate entity and not a corporate affiliate of Voya Financial. Voya clients receive discounted pricing on any Vault product. Vault pays Voya Retirement Insurance and Annuity Company (VRIAC) an ongoing quarterly marketing fee for referring plan sponsors that elect Vault’s student loan debt services.
Vault Match is based on Abbott Labs Private Letter Ruling. Plan amendment required. Employers should seek legal counsel on whether private letter ruling from IRS should be filed as there is no formal federal or regulatory guidance.
Products and services offered through the Voya® family of companies.