Would you trade vacation days to pay off your student loans? | The Tylt
Would you trade vacation days to pay off your student loans?
Unum Group, a major insurance company, recognizes that student debt is crippling its incoming workforce. In 2017, Inc. reported that 63 percent of millennials owe at least $10,000 in student loans, and this came at a time when student loan debt in the U.S. totaled at $1.2 trillion (it's $1.5 trillion today). In an effort to alleviate current and future employee's financial burden, Unum offered employees:
Cash for debt in exchange for unused vacation days. Each day is worth an employee’s hourly rate for an eight-hour day. Parents who share responsibility for a child’s loans also qualify to cash in.
Student loans can significantly impact one's ability to build wealth after college. According to a study from Student Loan Hero, "the average net worth of a millennial with student loans is only 25 percent of the net worth for a fellow millennial without them." Five vacation days for the year is a small price to pay if it means the painful process of paying off debt can end sooner.
Plus, millennials are already taking fewer vacation days than previous generations. According to Forbes' Larry Alton:
...as much as 48 percent of millennials aren’t using the full amount of paid time off they receive each year, and about half of Americans (53 percent) haven’t taken a vacation in the past year.
Although Alton recommends millennials take more vacation days, behavior doesn't change overnight. For many millennials in the workplace, it's an easy decision. Financial concerns continue to be one of the major causes of stress in the U.S., and for some, debt assistance will do far more for their mental health than a week off of work.
There's a reason millennials are taking fewer vacation days: they're afraid to ask. A reputation for laziness and entitlement preceded millennials in the workplace, and they've become the "burnout generation" as a result. Stress, exhaustion, and the constant need to prove one's self are the reasons why millennials don't take time off, and this type of pace can't last.
Why am I burned out? Because I’ve internalized the idea that I should be working all the time. Why have I internalized that idea? Because everything and everyone in my life has reinforced it — explicitly and implicitly — since I was young.
Importantly, she adds:
When we talk about millennial student debt,...It’s also about the psychological toll of realizing that something you’d been told, and came to believe yourself, would be “worth it” — worth the loans, worth the labor, worth all that self-optimization — isn’t.
On top of the extreme let-down of finding that your degree, which you were told you needed to get a good job and to build wealth, is not enough to pay off your student loans, you're asked to give up your earned vacation time in exchange for a few additional dollars towards your goal. Not only is Unum giving employees an unfair offer, but it will contribute towards the burnout that already plagues an entire generation.
Companies can and should assist employees with student debt whenever possible, but offering such assistance in exchange for paid time off is a cruel ultimatum. Plus, the money put toward employees' loans is negligible when compared to five full days off work.
How much workers can earn for their vacation days depends on their salary, but the company estimates an average of about $1,200 a year.
One employee has $22,000 in debt and tells Greenfield he plans to cash in his vacation days every year:
“I should take more days off,” he said. “But I continue to work to make sure I keep up with everything.”
No company should strive to create this type of working environment, where employees feel they must sacrifice something in order to gain something else–particularly when both sacrifice and gain have such a large impact on mental health.