The good news about student loans is that they allow millions of people to earn college degrees who otherwise wouldn’t be able to afford them. The bad news is that college graduates enter the workforce deeply mired in debt that deflates their net worth and keeps them cash-strapped for years, if not decades. The current wave of college graduates is facing debt in amounts far above previous generations.

Just how deep in debt are U.S. college graduates? Oliver Wyman, a global management consulting firm, sets the median figure for an undergraduate degree at more than $25,000. That figure rises with each advanced degree. Graduates with MBAs enter the workforce with a median debt of $45,000. Medical school graduates can expect to be $200,000 in debt.

The fallout from student loan debt

New graduates will likely feel the student-debt pinch in their monthly household budgets. Debt repayments for the typical college graduate will amount to $265 a month and for medical school graduates, $1,600 a month.

Based on the Oliver Wyman report, “The Student Loan Repayment Benefit: Opportunities to Serve Pressing Financial Need,” recent college graduates are drawn to metropolitan areas, where the concentration of jobs is high, but the cost of living is great. Living and working in high-end districts further inflates the student debt crisis. For young professionals in San Francisco, Boston, New York and Los Angeles, wages aren’t on par with living expenses, making housing virtually unaffordable.

The report studied 3,002 U.S. households — 34% of which had outstanding student debt — in May 2017.     

Massive student debt has health as well as financial consequences for borrowers. Among the study’s debt-laden participants, 80% cited their indebtedness as a major source of stress. The stress level is equivalent to that associated with saving for retirement and higher than that caused by high housing and healthcare costs.

A recent survey by American Student Assistance found that of 502 employees between 22 and 33, student loan debt impairs their focus on the job, sets back their ability to save for retirement and forces them to postpone pursuing advanced degrees.

Who’s addressing the problem?

Lawmakers recognize how much today’s graduates are overwhelmed by debt and, in respose, have introduced an updated version of a bill that gives employers a tax incentive to lower workers’ student debt. The bipartisan measure, Employer Participation in Repayment Act of 2017, sponsored by Senators Mark Warner (D-VA) and John Thune (R-SD), allows employers to make a yearly, tax-free contribution of $5,250 to employees with student loan debt. The IRS operates the program much like a 401k.

But will the bill pass? Bipartisan support should make any measure a sure thing, but until congressional leaders bring the bill to the Senate floor for a vote, it can't move forward.

The Oliver Wyman study shows that only 4% of organizations offer student loan repayment as a benefit. But as employers expanding their benefits options to attract and retain talent — and focus more on employees’ physical and emotional well-being — that number could increase.

“Our research finds that employees who have student loan debt carry a significant financial and emotional burden, ultimately impacting them at work and in their personal lives,” says Tim DeMello, CEO of Gradifi, a Boston-based startup specializing in loan repayment and fixing the student loan debt crisis. “If employers are able to help their employees pay off that debt faster, they’re able to alleviate some of the stress; ultimately creating a better quality of life both at work and in their employee’s personal lives, and in turn creating a decisive hiring advantage in recruiting highly skilled workers.”

Others agree. Among the participants in a Student Loan Hero survey, 46% said they would accept a plan that helps them pay down their student loan debt over a 401k, if they had a choice. Another 53% said they would choose a repayment program over paid time off.

Aetna, PricewaterhouseCoopers (PwC), Fidelity, Penguin Random House, First Republic, and Chegg are part of the 4% of employers offering the benefit.

Is educating workers a factor?

What about employers that can’t or won’t offer a student loan repayment program? Can they still help employees manage their student debt?

Michael Jarvis, business development leader at Purefy, a national online lender, says his firm is working with employers to educate workers about the benefits of refinancing.

“In my experience, corporate management is very receptive to educating their employees about ways to stay on top of their personal finances,” says Jarvis. “We take pride in working with companies that are committed to rewarding their employees for their hard work,” he adds, referring to employers who seek out companies like his for refinancing advice.

However, Jarvis believes that refinancing is the best solution to paying down a student loan. He says that, depending on employees’ individual goals, refinancing allows them to lower their borrowing cost.

The federal government also makes available a student loan forgiveness program to qualified borrowers. This option covers certain occupations, including certain public service workers like teachers and nonprofit employees, and employers can help employees navigate the program.