SANTA CLARA, Calif.,
Sept. 10, 2019 /PRNewswire/
-- Chegg Inc (NYSE: CHGG), the leading student-first learning
platform, today called on leaders from
business, government, and education to unite in
tackling the U.S. student debt crisis. In a new policy
proposal, Chegg urged tax policy changes and the creation of
employer-sponsored student loan repayment programs to realign
education as an affordable and relevant path to career
success.
"Unsustainable levels of borrowing for education are taking
a dramatic toll on the financial future and psychological
well-being of American students
and their families and creating a permanent debtor
class for America's future workforce," said Dan
Rosensweig, President and CEO of Chegg.
"The effects are particularly overwhelming given the rapid
rising costs of education and slow wage growth. At the
exact moment when we want young adults to be getting the skills
needed to succeed and build their careers, we are making their
financial situation as stressful as possible. This has created
a generation of young people who are struggling to succeed under
the heavy burden of loans," Rosensweig added.
New research from Chegg.org shows the adverse effects
of student debt are more widespread than previously
understood, including those thought to be better off. 48
percent of borrowers with household incomes over $75,000 a year reported having
difficulty making payments. 66 percent of borrowers with household
incomes over $75,000 a year are
somewhat or very worried about their financial future.
"What we are seeing is that student debt is felt more deeply and
widely than previously thought, especially for younger Americans,"
said Ajita Talwalker Menon, higher education expert and
former Special Assistant to President Obama for higher education,
one of the report's authors. "Student debt also impacts older
Americans who face substantial financial pressures in mid-career
even as they transition to retirement."
1 in 3 younger borrowers report having to forgo other monthly
payments in order to make student loan payments. 83 percent of
those who have forgone other monthly payments had skipped credit
card payments, with 69 percent forgoing health expenses or
insurance premiums. These actions can trigger harsh
consequences threatening an individual's financial security, such
as significant collections fees or damage to credit scores.
Student debt has also led borrowers to sacrifice medical
check-ups, while some struggle with depression or anxiety due to
the burden of student debt. Moreover, research shows that financial
stress at work carries deep costs, including lower productivity,
increased absences, turnover, and more healthcare claims.
The report, "Unlocking the American
Dream: Student Debt Solutions for Our Future
Workforce", contains a series of policy
recommendations, including a call
for employers to become more active in easing the
debt repayment burden on their employees.
"Employers have the power to help alleviate pressures associated
with student debt, while using loan repayment assistance to attract
and retain top talent," said Rosensweig. "There are clear,
effective solutions that can bring employers into the conversation,
as well as provide immediate relief for millions. Now is
the time for the private and public sector, as well as
education systems themselves, to work together to address the
issue," he added.
Only 8 percent of employers offer student loan repayment
assistance (up from 4 percent in 2018). In June, Chegg announced a
new program to help employees reduce their student loan
debt by contributing as much as $6,000 annually, focused on entry-level through
mid-level managers, in addition to an existing educational benefit
of $5,250 for employees continuing
education.
Money offered to employees for student debt is a taxable
benefit, however. Those with student debt must earn a wage, pay
taxes on it, and then use their after-tax dollars to pay off
high-interest student debt back to the government.
In its report, Chegg set out short- and medium-term solutions to
reduce stress on borrowers. It called on policymakers to use the
tax code to encourage employer-sponsored loan repayment programs,
in a similar way to existing programs to encourage retirement
savings and continuing education. It also called for similar tax
treatment for individuals without access to such programs,
including workers in the freelance and gig economy. In addition,
Chegg called for simplification of the student loan system to help
borrowers, such as by managing repayment directly through the IRS
and with income-orientated approaches.
For more information and to download the policy proposal on
student debt go to:
http://chegg.com/press/solving-student-debt
About Chegg
Chegg puts students first. As the leading student-first
connected learning platform, Chegg strives to improve the overall
return on investment in education by helping students learn more in
less time and at a lower cost. Chegg is a publicly held company
based in Santa Clara, CA and
trades on NYSE under the symbol CHGG. For more information,
visit www.chegg.com.
About Chegg.org
Chegg.org is the impact, advocacy, and research arm
of Chegg, Inc. addressing issues facing the modern student.
Media Contact
Press@chegg.com
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