Home » Living with Student Loans » Student Loans and Salary Negotiations

Student Loans and Salary Negotiations

Should student loans enter the discussion when you are negotiating with a new employer? In some cases, it can get you a bigger salary. In others, it might be a mistake.

Written By: Michael P. Lux, Esq.

Last Updated:

Affiliate Disclosure and Integrity Pledge

One of the many firsts that often happens after graduating from college is salary negotiations. Many employers are all too willing to cut corners when it comes to paying employees.

One of the ways employers can save a few bucks is to negotiate salary with the new hire. In a competitive job market, many entry-level employees are willing to take less just to get a job, and to get their foot in the door.

If you are lucky enough to find yourself recently hired, you may face a difficult question… do I bring up my student loans when negotiating salary?

Reasons to bring up your student loans

Did you go to a great college? Was it expensive? Was that great education part of the reason you were hired?

If your education is a big factor in your selection for the position, it makes sense to point out that it wasn’t free. Student loans are a huge expense for many graduates, and if paying them off is a big challenge for you, it is definitely fair to bring them up.

Do you have multiple job opportunities?

This issue especially applies whether you are looking at a government position and a private sector position. If you are negotiating with a private sector company, you should point out that student loan forgiveness programs are a HUGE perk for government employees. If they want to secure your services, merely beating the salary isn’t enough, they have to compete with this amazing benefit.

Even if you don’t have multiple job opportunities, it still pays to research what other employees in your industry pay. If you just took a job at one of the three large accounting firms in your city, and you know the other two provide student loan assistance programs, you could use the competition as an example of the current trend.

Reasons not to bring up your student loans

Some people are old school and they simply do not understand the realities of student loans for this generation.

If you are negotiating with someone who paid for college by working overtime during the summer, they may not realize that the cost of college has grown so much. They also might not care. Tread carefully in this situation, because you don’t want to minimize the hard work that they put in to pay for school, nor do you want to call them old or out of touch.

Another reason not to bring up your student loans would be if your new employer already has a student loan program. If they have one, it becomes much harder to use that as a point for negotiation. On the plus side, it is a program you have to look forward to as a new employee.

Why should student loans matter?

The person on the other side of the table may tell you that what you make is based upon the work you perform and how hard it is to find someone to perform the same work. This would be the standard economics argument, you perform a service, and the market dictates the price of that service.

In response, you could share, especially if the job requires a college degree, some information on the average debt of recent graduates. If your debt is less, point this out and say that even though you did a great job minimizing debt, your debt still does exist and is a reality of your financial situation. Doing so can make you seem more reasonable and hard working. If you owe more than average explain why your education was worth the extra money and how it will benefit your new employer.

Ultimately, student loans are significant when you are negotiating salary because they are a major obligation and a reality for millions of Americans. Your new employer can nickel and dime you, and you may have to take a lower salary now. However, you can tell them that if they pay your right, you will be able to focus all of your energy on being a great employee and instead of worrying about your debts.

A word of caution

Many recent graduates make the mistake of thinking they deserve this salary or this perk.

Don’t make that mistake.

You deserve whatever your new employer says you deserve. Use your student loans not to issue demands, but to offer a realistic assessment of what you think a fair salary would be.

A final tip

When you negotiate, think about the range of salary that you would expect, and then the range of salary that your employer is willing to pay.

Obviously, they won’t tell you this information, but it is helpful to remind yourself that there is likely a range of numbers that will be acceptable to both sides.

Your goal should be to end up on the high side of the range in which you are both happy. Use student loans, your qualifications, and anything else you can think of to get your employer to drive their number up. However, keep in mind that the best negotiation tactic is often to just listen and let the other side as they put their cards out on the table.

Instead of making demands, simply ask, do they use student loans as a salary consideration? The more information you have, the more confidently you can negotiate.

About the Author

Student loan expert Michael Lux is a licensed attorney and the founder of The Student Loan Sherpa. He has helped borrowers navigate life with student debt since 2013.

Insight from Michael has been featured in US News & World Report, Forbes, The Wall Street Journal, and numerous other online and print publications.

Michael is available for speaking engagements and to respond to press inquiries.

Leave a Comment