A January 2024 research report from WGU Labs titled “Drowning in Debt: Student Loans Weigh Down Borrowers” sheds light on the alarming state of student loan debt in the U.S. The report highlights the disproportionate impact on borrowers who did not complete a bachelor’s degree, women, Black individuals, and LatinX individuals. With student loan debt surpassing a staggering $1.8 trillion in 2025, it is evident that the current system is failing borrowers and requires urgent attention.
Table of Contents
Key Points
• A 2024 WGU Labs report highlights the severe impact of student loan debt, surpassing $1.8 trillion in 2025.
• 43% of borrowers struggle with repayment, with Black, Latine, and women affected disproportionately.
• Student debt can significantly delay financial milestones like saving for retirement and buying homes.
• Borrowers who didn’t finish college have fewer financial assets and higher levels of regret and stress.
• Educating borrowers and expanding employer benefits are crucial steps to address the crisis.
Key Findings
The survey, which included over 3,000 student loan borrowers, was conducted by WGU Labs in conjunction with Savi and Gallup. Here’s what they found:
1. Struggles with Repayment
The survey revealed that 43% of borrowers have been struggling with student loan repayment for many years. This struggle was particularly high among Black and Latine borrowers, those without a bachelor’s degree, and women. Additionally, over 10% of respondents were in default, with borrowers without a bachelor’s degree and Black respondents being more likely to be in default.
2. Toll on Mental Well-being
The burden of student loan debt affects borrowers’ mental well-being. Higher levels of regret, stress, and hopelessness were reported among women, Black and LatinX borrowers, and those without a bachelor’s degree. Furthermore, less than 40% of respondents believed their education was worth the financial cost. (Note: this is also covered extensively in SoFi at Work’s Student Debt and the Impact on Mental Health.)
3. Financial & Personal Milestones Delayed
Student loans delay important financial milestones for borrowers, such as saving for retirement, buying a home or car, and achieving financial security. Respondents with at least a bachelor’s degree who took out student loans had significantly fewer financial assets than those who never did.
Though not to the same extent as financial milestones, student loans can also delay personal life milestones. Borrowers with at least a bachelor’s degree and men reported higher levels of delay. Interestingly, when asked about pursuing future education, there was also a disparity among borrowers: Those without a bachelor’s degree expressed a greater need for further education, while Black borrowers, LatinX borrowers, and men were more likely to plan on pursuing additional education.
Recommended: How Employers Can Help Close the Racial Wealth Gap
Calls to Action
The report concludes with two crucial calls to action to address the student loan crisis.
1. Educate Borrowers on Repayment
Borrowers, especially those without a bachelor’s degree, need better information and support regarding loan repayment options. Higher education institutions, borrower advocates, and employers can all play a role in providing this education and support.
2. Expand Employer Student Loan Benefits
Employers can make a significant impact by offering student loan repayment assistance as part of their employee benefit programs. Federal policies provide tax incentives for employers to assist with loan repayment, and public sector and nonprofit employers can certify employees for loan forgiveness. Streamlining the eligibility process and encouraging employers, particularly those with low-wage workforces, to offer debt repayment programs is crucial.
Additionally, SoFi at Work would recommend:
3. Expand Access to Tuition Reimbursement Programs
Launching a tuition reimbursement program can be a game-changer for your organization, attracting and retaining top talent while fostering employee growth and engagement. It can also address some challenges with student debt head-on by supporting employees’ educational aspirations before they must take on debt. While a number of large employers offer this benefit, it has historically been an underutilized resource in the effort to reduce the student debt burden.
Offer a Student Loan Match
An innovative benefit now being offered by many companies is a student loan match. Officially known as a Qualified Student Loan Payment (QSLP) match, it involves contributing to an employee’s retirement account based on the student loan payments they make. This option was created by the SECURE 2.0 Act, which became effective for most companies at the beginning of 2024. This is yet another tool employers can access when alleviating the stress of employees’ student loan debt.
The Takeaway
The ongoing student loan crisis presents significant challenges, particularly for underrepresented groups and those who never completed their bachelor’s degree. Addressing this requires a multi-faceted approach, including better borrower education and expanded employer benefits like repayment assistance, tuition reimbursement, and student loan matching programs. By fostering collaboration among policymakers, educational institutions, and employers, we can create a fairer and more accessible higher education system, making student debt less of a burden for everyone.
SoFi at Work can help. We’re experts in the employee education assistance space. With SoFi at work, you can access platforms and information that will help build the benefits needed to create a successful and loyal workforce.
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