Denver, August 29th, 2017
Millennials are drowning in college debt and it is killing their ability to buy goods, buy homes and start businesses, which, in turn, saps the strength of the overall economy. One Denver start-up wants to tackle this problem, even if it’s just one millennial at a time.
SoCap Agency, a full-service marketing and consulting firm, aims to pay off the remaining school debt for graduates, through its charitable arm, SoCap Cares. SoCap will work directly with companies interested in helping employees climb out from the burden of school debt.
“SoCap, which is shorthand for Social Capital, wants to practice what it preaches. The basic premise behind social capital is that we all get further through collaboration and bringing more value to the marketplace. So, if a young person struggling under the weight of massive school loans is able to help us by tapping his or her network of family, friends, and employers for new business opportunities, then we will, in turn, help him or her by paying off remaining debt,” said Devon Kerns, chief visionary officer of SoCap.
Paying off school debt is no small task. As of 2017, American students owed a cumulative $1.4 trillion in loan debt. In Colorado, the average school debt is $25,840. The monthly payment for school loans averages $351, which, if added to rent, utilities, car/transportation expenses, and other non-discretionary costs, does not leave recent graduates with much discretionary spending money or money to start a business.
“The idea for the payoff program came after meeting with the Aurora Chamber of Commerce, where the most common theme among community and business leaders was the challenge of attracting millennials as customers, homeowners, business owners, etc. And, most agreed that it was not consumer or entrepreneurial apathy among this generation; it was the weight of their post-education debt load,” said Kerns.
“The level of debt they are carrying is unprecedented and entirely undermines their potential. They are stuck working multiple jobs or working in careers they aren’t passionate about, simply because they have to worry about making their monthly loan payments. This is happening at a point in their life when they should be taking risks, exploring new and challenging opportunities, and following their passions. Instead, fear and financial insecurity is holding them back. And the entire economy suffers for it,” said Kerns.
While the details of the debt payback program will vary from student to student, SoCap will help at least one student per quarter.
“There will be a selection process. One component will be the business opportunity the individual brings to the table. When that opportunity results in a paid contract, the commission or finder’s fee of $5,000 to $25,000 will go to pay off that person’s school loan. We are specifically looking for former students with compelling stories to tell and a desire to do something more in their community, something they can’t do with debt looming over their heads.. We feel that if we can help tell their story through this process they will reap rewards beyond the debt payoff, whether it’s job opportunities, potential investors for a start-up, or the ability to pursue their dreams and passions,” said Kerns.
SoCap, which helps companies build, shape and enhance their employer and product brands, will work directly with employers to provide this debt-payoff program to recent graduates on their payrolls.
“Right now, most companies are struggling to attract and retain young millennial workers. The average millennial stays just two years with his or her employer. A big reason for the high turnover is company culture, but employers could help themselves by addressing their workers’ school debt,” said Kerns.
One survey found that 90 percent of employees said if a company was willing to help them with their loans that they would commit to the company for five years. Yet, only 4 percent of companies currently offer some type of loan payback program.
“We want to help companies tap into this amazing opportunity to address the debt crisis facing the young workers who represent the future of their organizations. We want them to realize that by doing so, they will increase retention, engagement and productivity, as well as be better positioned to attract more talent,” said Kerns.