Americans are struggling with student loan repayment. Given the hardships this very common debt can cause, consider these reasons a student loan repayment assistance program could be a powerful addition to your company’s benefits arsenal.
It will help you attract more job candidates. According to 2015 data from the Society for Human Resource Management, only 3 percent of employers are currently offering student loan repayment assistance as a benefit—despite the fact that the majority of American workers would find it attractive. A recent survey of more than 1,700 employees conducted by Student Loan Hero, a financial education website, found that 77 percent of respondents rank student loan repayment assistance benefits as slightly to very important. Only 23 percent were uninterested in this benefit. When asked if they’d prefer student loan repayment assistance or additional vacation/paid time off, 53 percent chose the former.
It will keep you keep your employees engaged. Engaged employees are actively invested in their work and committed to their employer. Unfortunately, financial distractions—such as student loan repayment struggles—can interfere with that engagement. According to the results of a survey conducted by American Student Assistance, 62 percent of respondents with student debt report it poses a hardship on their budget when combined with other household spending. Thirty-five percent say student loan payments make it difficult for them to purchase daily necessities. And more than half say student loan debt has affected their decision or ability to make larger purchases such as a car or a home.
It requires little sales effort or benefits education
Unlike 401(k) plans, health savings accounts and life insurance, you don’t have to convince your employees that they need student loan repayment assistance. They’re already dealing with the immediate reality that debt every day. Additionally, a repayment assistance program is much easier to administer. There’s no complex terminology to understand, and no need to spend hours educating your team about options or how the program functions.
It appeals to all employee demographics
Student loan repayment assistance doesn’t just appeal to workers in the Millennial Generation (currently between the ages of 18 and 34). Those from Generation X (ages 35 to 50) are equally burdened by education debt. A Gallup poll found 20 percent of Americans have student loans, including 35 percent of Millennials and 25 percent of Gen Xers. Those from Generation X actually have the largest average loan balances (more than $30,000) outstanding. Six percent of Baby Boomers are also paying off student loans.
It will improve the use of your employer-sponsored 401(k) plan
Many workers postpone contributions to a retirement account until they have their student loan debt under control (50 percent according to one survey). If your employer-sponsored 401(k) plan is underutilized, adding a student loan repayment assistance benefit may help.
If you’d like to explore enhancing your company’s employee benefits package with a student loan repayment assistance program, contact your benefits advisor today.