We spoke with two of our HR experts at opposite ends of the generational spectrum: Innecto Reward Consultant Spencer Hughes, 27, who graduated from Swansea University in 2018 with a degree in Geography and Geoinformatics, and PG Business Development Director Andrew Walker, 59, who studied Modern Languages and linguistics at Aston University before student loans were introduced.

Spencer, what do you feel are the practical and psychological impacts of a student loan?

SH: Happily, I’m a little bit down the track now and enjoying a really good job, but my student debt felt more of a burden when I started out in work. I was having to pay it while also taking care of lots of other new considerations: things like covering my own rent and council tax, running a car and basically being out in the big wide world on my own, as opposed to being at home or in a ‘pack’ like we were as students.

It was certainly a higher proportion of my earnings back when I first started paying it off and I remember feeling quite concerned about that. As my career has progressed, the amount I pay back each month has increased and generally I think less about my debt than I used to. Looking at it objectively, you could say that career and pay progression have eased the impact for me practically and mentally.

How much can the company help you with managing the debt?

SH: The debt is obviously mine and ultimately my responsibility but being employed has its benefits. When Personal Group pays my wage, I just see the loan repayment like a tax, something that is deducted from what I take home at the end of each month. To be honest I rarely think about it. Because it is handled as part of PAYE I probably feel less of an impact and financial burden. I know that if I were ever out of work the payments would stop unless I’d earned a lot in that year, so I feel less exposure to the debt.

By comparison, I have a friend with a similar student debt who has chosen to be self-employed and run his own tattoo business. Without the structure and support of a company and PAYE system, he needs to remember to set aside an amount to pay his student loan each month, which does make it more of a constant nag for him.

The Institute for Fiscal Studies estimates that 83% of people with English student loans will not clear the debt, including the interest, within the 30 years. Does that surprise you?

SH: It makes me wonder whether I am one of the 17 per cent! And whether they should structure the repayments differently, but that’s not my area of expertise. If I still owe something after 30 years it gets wiped, and I guess for some people that could act as a disincentive to get on and earn more and instead take a less pressurized job that pays less. I’m not sure many young people are out there making that conscious decision though – the statistic is more likely down to the fact that the interest rate is over 7%, higher than most mortgages, and the interest that is added is not the interest you pay, so people tend to take a less aggressive stance to paying it off. Also, perhaps due to the relatively high number of self-employed people, although you’d have to look at the numbers on that.

Andrew, how do companies show young workers they are taking this issue seriously?

AW: I feel for our young workers hitting a competitive employment market with this added pressure, on top of a housing market out of reach for many. But these things are also relative - each generation has its own challenges to face. All those years ago when I left university, I may not have come out with a student debt but there were other factors that put us on the back foot. My first mortgage was 12% and rose to 15%. We then sold the house for less than we paid for it, so were immediately in negative equity and that was my entry into the workplace and housing market. That made me look for roles that would simply pay me more and reward my effort and my results. It made me more transactional.

Now there are more things employers can offer to help. If some young people are happy to earn a bit less – and debt repayment might be only one reason for that – companies need to adjust the way they structure their Employee Value Proposition. With a bigger toolkit now we can place more of an emphasis on flexible benefits like buying and selling holidays and the ability to work from home; on ESG incentives that young people might be more interested in; on health and wellbeing products; on offers or discount vouchers; on tech platforms to make things easy. There are more strings to a company’s bow these days.

For graduates struggling with the added stress of the loan, how can companies help?

AW: That is an important question, and the answer is two-fold: in mindset and in what they can make available. If a company creates a culture and environment where people of all ages feel comfortable sharing their issues and burdens, either with a direct peer, manager or mentor, that can have a stabilising effect on the workforce, and particularly those younger workers. If they can feel comfortable asking someone for practical advice, and a colleague can then give them a steer or point them towards an EAP, that can only be a good thing. Companies need to look inwardly and ask how they can create that kind of culture because it will be unique to each organisation.

Beyond that, there are financial wellbeing tools that companies can make available as practical measures such as discount vouchers on shopping and advice or workshops on debt and saving. There is also much to be gained from signposting to all the help and guidance in a good Employee Assistance Programme (EAP). Related to that, there’s a great deal more companies could do simply to educate our young workers around personal financial management, to backfill what school does not do. Some companies are also making specific targeted offers for student loan repayment.

Thinking more radically, if enough people thought student loans were a bad idea and an inconvenience to business, companies could get together through federations and other groups to lobby government for their abolition.

SH: I think that is a great idea.

AW: Of course you do.