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I went to college in Southern California near the coast. One afternoon, there was news that an earthquake at sea could trigger a tsunami. Being the brilliant college student that I was, I went to the beach to watch....until some sense of reason hit me and I asked myself "what am I doing?!" I should avoid this potential disaster.
A similar feeling hit me with the news that 5.3 million student loan borrowers received a letter during the week of May 5th (2025) that their defaulted student loans are being sent to collections, and another 5 million borrowers will be in default shortly. The bigger tidal wave is that these individuals will have their wages garnished in late summer (2025).
I was on a panel at the Spring 2025 PSCA conference where the topic was "Bridging the Gap: What Employees Really Want vs What Employers Think They Want in Financial Wellness". It was a standing room only session. This is a hot topic that just got hotter.
There are close to 136 million Americans that have a full-time job. These 10.3 million student loan borrows in default (or soon to be in default) represent 1 out 13 workers. Well, maybe it is not that bad because some of the borrowers are in graduate school and potentially gathering more debt. Companies that have a highly educated workforce could have more than 1 out of 10 workers receiving these collections letters and soon going into garnishment.
Financial stress in the workplace is a big deal and getting bigger. According to Brightplan's Wellness Barometer Survey: most employees, with 86% of Gen Z included, feel anxious about their financial circumstances, which in turn can cause a loss in workplace productivity. This translates into workers losing more than 7 hours of productivity every week because of their financial worries, while Gen Z reports over 8 hours a week in lost productivity.
How can we fix this? According to a Prudential survey: Employees want benefits that go beyond traditional coverage and more completely address how they live and work," said Michael Estep, president of Prudential Group Insurance, in a statement. "The workplace is at a tipping point, and there's so much at stake for employers."
Is this worth addressing? According to a Morgan Stanley survey: HR leaders expressed concern about retaining employees amid the economic strain, as 81% of those surveyed by Morgan Stanley said they worry employees will seek other job opportunities if their company cannot offer benefits to help better manage employees' financial stress. At the same time, 91% of employees said they would feel more invested in staying at their company if it offered financial benefits that met employees' specific needs.
If you are interested in exploring a modern approach to beneftis that truly address financial stress in the workplace, please reach out as this is exactly what we do at Thrive.
Let's not stand on the beach waiting for the giant wave to hit us.
