How Student Debt Affects Business And What Brands Can Do About It

As students head back to school, a recent hot topic has been student loans. As these staggering stats show, the issue is reaching a crisis point:

  • Over 40 million Americans have student loan debt, coming to a grand total of $1.2 trillion
  • The average American is carrying $26,000 to $29,000 in student loans
  • Only 37% are making payments on time and reducing their balances

The crushing burden of student debt is such an urgent problem that presidential candidates are now compelled to share their plans to address it. Democratic presidential contender Bernie Sanders has proposed a debt-free college plan, while his rival Hillary Clinton has countered with a $350 billion plan to significantly reduce student debt. On the Republican side, presidential hopeful Scott Walker has been touting his accomplishment of freezing tuition at the University of Wisconsin for four years. 



This issue poses a growing challenge for the business world. It is causing young adults to delay moving out, getting married, starting families and launching their own businesses. The Pew Research Center estimates that about 26% of millennials still live with their parents. All of these have tremendous economic repercussions. Companies need to find a meaningful way of engaging with students who are saddled with debt, in a way that is beneficial for both brands and their customers. 

Here are three ideas for how brands can more effectively connect with teens and young adults and assuage their concerns about this issue.

1. Provide scholarship opportunities. 

To avoid taking out loans, many students are seeking creative ways of financing their education. There’s an opportunity for companies to create goodwill with these customers by offering scholarships as part of a corporate social responsibility initiative. In fact, scholarships are a great way of engaging entrepreneurial teens in co-creation and ideation. Imagine if, say, H&M offered a scholarship to the fashion student who designed the best new jeans for back-to-school season. A company like Ford could offer a scholarship to the engineering student with the best idea on how to improve fuel efficiency. These types of projects tap into the creativity of young people while also helping support their education. 

Offering grants to employees or their children is also a great idea. For example, Starbucks, a company that is frequently a leader in HR practices, provides college education to every benefits-eligible employee via a partnership with Arizona State University. Companies that are thinking of launching a similar program can maximize the initiative’s success by engaging with employees to better understand their needs and opinions. 

2. Provide flexible work opportunities for college students. 

If you have high school or college students on your staff, be mindful that these employees often need flexibility in their schedules. Millennial and Gen Z employees can provide critical insight on consumer lifestyle trends, so it’s a good idea to ensure they’re happy with their work arrangements. 

Young employees appreciate a flexible schedule, and providing a work environment that caters to students creates life-long relationships with these young customers. This is something I know firsthand: I started working in media thanks to a paid college internship, and I’ve developed a life-long loyalty to that company because of the way they treated me. They gave me a paid job with flexible hours at 19, taught me all about media, promoted me onto staff at the start of my senior year, and gave me a springboard to the rest of my career. To this day, I watch all their programming, evangelize it to others, and support them every way I can in our professional collaborations.

3. Market and communicate more thoughtfully. 

The student loan crisis—coupled with the weak job market of the last six years—has greatly changed consumer lifestyles. As I mentioned earlier, young people are delaying moving out of their parents’ house, getting married and having kids. For many of these people, home ownership might not ever be an attainable life milestone if student debt makes it difficult for them to save money.

Even upscale customers (those between the ages of 18 to 34 who are making six-figure incomes, often with no mortgages or kids to support) might not have as much disposable income if they’re carrying large student debt loads.

Given the evolving lifestyle of today’s youth, your marketing efforts need to reflect accurate life stages, correct price points and sensitivity to the fact that many are shackled to an incredible amount of debt. Your market research program needs to be able to thoroughly investigate these changes. You need insight not just on your product or category; make sure that you understand the whole picture as well and what your young customers are going through. Engage with millennials and Gen Z in a two-way conversation frequently to make sure that your marketing messages reflect the reality of their lives. 


The issue of increasing student debt requires complex socioeconomic solutions that are largely out of the hands of businesses. But by providing students with the opportunity to work, earn scholarships, co-create and share the details of their life-stages and life-needs, companies can make today’s “starving student” tomorrow’s best customer and executive.

2 comments about "How Student Debt Affects Business And What Brands Can Do About It".
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  1. Alicia Sanders from Sanders and Co, September 10, 2015 at 12:27 p.m.

    I really do not care about how it affects business. I care about what impact it has on my family. There are two children in my family. We are almost the same age, so we had to take two student loan 1 year difference. This was a hard decision. But it is not like I could say no to one of my children. Now they have to study and work. And sometimes even skip classes to make money. Luckily, they can get help of top essay review service online, but it is not like they can do this all the time.

  2. Cattivo Pagatore from Saldadebiti, December 3, 2015 at 5:29 p.m.

    The government has to pay attention on situation with education and they have to know
    how expensive is education, more and more people take personal loan and college loans have high rates. Having too many debts take freedom away. - <a href="">Prestiti personali</a>

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