More employees want student debt repayment benefits
Insurance companies are joining a growing group of employers offering student loan repayment assistance.
Student loan debt has reached its highest point in the U.S. Forbes reported that more than 44 million borrowers collectively owe $1.5 trillion in student loan debt. Since the recession (2008-2014), student debt has increased a whopping 84%.
With a large percentage of the workforce burdened by student debt, employers are taking it upon themselves to lift some of the weight — but just a few. The Society for Human Resources Management reported that only 3% of organizations offer some form of student loan repayment benefit, while just 1% of employers plan to add this benefit in the future.
According to Gregory Poulin, CEO and co-founder of Goodley, if employers are interested in attracting and retaining top talent, they should consider adding student loan repayment to their suite of benefits: “If employees are feeling stressed about student loan debt, it might seem intuitive to just raise their salaries. After all, with more money, these workers would be able to pay off a larger chunk of their student loans. However, today’s employees are interested in the full package, not just salary,” he wrote for BenefitsPro.
A study by the American Institute of CPAs asked millennial job seekers to rank their top three desired employee benefits. Forty-one percent said they want student loan forgiveness as an employee benefit, third to just health insurance and paid time off. Another study from Tuition.io says three out of four job candidates would prefer to work for a company that offers student loan repayment assistance.
Supporting employee’s financial wellness
Recently, The Hartford announced a new student loan repayment program to help its employees pay down student debt. The program will commence in early 2020 and employees will be eligible to receive a lifetime total of $10,000 toward their student loan debt.
“The increasing cost of student debt continues to be a concern for the country and our employees,” Marty Gervasi, chief human resources officer at The Hartford, said in a statement. “It is a financial burden that can cause a great deal of stress, and we want to help employees have more financial flexibility, enabling them to focus on their lives and careers.”
Earlier this year, Travelers also announced a loan repayment benefit, in which it will make contributions to employees’ 401(k) accounts by matching the payment amount an employee makes towards repaying his or her student debt.
A win-win benefit
Although it could cost employers more to offer student loan repayment benefits, they can also expect to see net rewards from investing in employees’ financial health.
Financial stress is the number-one cause of stress employees — more than health concerns, relationships or job pressures — says a survey conducted by PricewaterhouseCooper. As a result, bottom lines are affected when financial burdens impact employee performance.
“Student loans are such a pain point with many workers that the perceived value of a dollar going toward student loan repayment is higher than the perceived value of higher pay,” Poulin noted. “Repayment assistance, therefore, seems more attractive to employees than a higher salary … Help employees by providing financial wellness perks, and you could actually improve your overall business operations.”
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