In June, I met with Gradifi CEO David Chang, Broad Institute CPO Andy Porter, and Suffolk Construction Senior Manager of Total Rewards Jackie Crain at the Gradifi offices in Boston to discuss the student debt crisis. As people operations leaders, Chang, Porter, and Crain had a lot of interesting things to say about the mounting issue of student debt and the role employee rewards programs are playing in this complex issue. Notes from the conversation, along with the full video of the discussion, are below.

The Student Debt Trap

Looming student debt forces many graduates to make different decisions about their careers. Even if a grad has a specific career path in mind, they may need to decline a more attractive job offer for one that ensures better financial security.

In other words, student debt makes grads more likely to avoid risk, even if it means turning down jobs they want. It should be no surprise that many of these grads end up in jobs they don’t find very engaging. As a result, retention rates for Gen. Z and millennial employees can be quite low.

Debt Stops Diversity

While all kinds of students are trapped by debt, the burden is disproportionately borne by Hispanic and black students. Once these students enter the labor force, they will feel more pressure to pursue higher-paying jobs in order to pay off their loans. This puts startups in a bind: Many startups rely on promises of future equity rather than cash now in order to attract top talent. If Hispanic and black grads are less open to such compensation models, then startups will have a hard time building more diverse teams.

Cost of living should also be a concern for startups, many of which are located in expensive urban areas. If recent grads have student loans to worry about, they won’t be inclined to move to areas where the cost of living is high.

The Role of Employers in Combatting Student Debt

A large portion of the current and future workforce is struggling to pay for education. Savvy employers can see this as an opportunity and seize the chance to play a role in reducing student debt burdens. That said, there is debate over how involved an organization should get in its employees’ student loans.

Some organizations consider student debt assistance an essential option for a flexible benefits package, while companies that already offer competitive 401(k) plans may wonder about the wisdom of offering student loan payments as well. While these businesses acknowledge that debt-laden grads need money in the present, they also see the benefit of helping employees save for the future.

An important question for both employees and employers to consider is how student loan repayment assistance might affect employees’ salaries. At the moment, it seems many young employees would be happy to accept a slightly lower salary if the company also offered student loan repayment assistance. Not only does that benefit lift weight off an employee’s shoulders, but it also shows workers that the company truly cares about its team members. When a company helps employees battle debt, that action resonates with prospective employees. Thus, student loan repayment assistance can be a key tool in attracting and retaining more talented candidates.

The Future of Education and Student Debt

While it’s impossible to know what the future holds, it is clear we need new approaches to education costs and student debt.

Despite the mounting cost of a traditional four-year college education, it seems unlikely in the near future that businesses will change their educational requirements for employees. However, as new options for eLearning continue to develop and students grow increasingly sensitive to price, educational institutions may have to get more creative in how they offer education.

If employers start shouldering more of the burden of their employees’ student debt, large companies may eventually be able to apply pressure to universities to reduce the cost of education. As those impacted by student debt become adults, we may see a shift in how people approach saving for college. We may also see changes in how people value education. While people today are typically attracted to highly competitive schools with well-known names, they may soon begin to assess colleges in terms of the economic return they can provide.

You can watch the full video of the roundtable discussion here.

A version of this article originally appeared on the SelectSoftware blog.

Phil Strazzulla is the founder of SelectSoftware.

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