Debt, and especially student debt, has been a part of the national conversation for some time, and for good reason. It's gripping the nation. It seems like it's harder and harder for employees to make ends meet while being required to juggle their living expenses and make the required minimum payments on outstanding debt. A large percentage of Americans are not just dealing with household or credit card debt, but with the much larger swath of student debt.
With this in mind, here are some quick facts on student debt in the U.S. to get the problem situated. U.S. student loan debt exceeds $1.4 trillion. In addition, there are millions of debtors in default. Student debt is the second highest debt in the country. It is only second to mortgages.
Now, if only there was a way for employers to use this to their advantage…
It seems like millennial workers with student loans would value working for a firm that assists them in paying off their student debt. As more millennials start to join the workforce, employee benefits, not just salary, are becoming more of an attractive recruitment technique. But less than 5 percent of companies actually offer student loan repayment assistance to their employees.
Let’s break down the concept of student loan repayment and why offering it as an employee benefit should be seriously considered.
What is It?
Student loan repayment benefits are when companies offer sums per year in student loan repayment to employees. For example, Penguin Random House will pay $1,200 per year (up to $9,000) in student loan repayment benefits for any full-time employee who has more than 1 year of service with the company. This benefit is usually doled out on a monthly basis, so Penguin House’s benefit would amount to $120 in monthly contributions.
Why Use It?
In this day and age, more and more job seekers are looking to find a place to grow. Millennials are vying for attention with job performance critiques, looking for areas to grow professionally, and seeking useful benefits that match their life in addition to aid with financial burdens. As an employer, it is an excellent recruitment tool, employee retention tool, and employee engagement tool.
From the worker’s perspective, this is an obvious perk to take advantage of. Accepting the contributions will help cut down on student debt, leading to a quicker repayment.
Offering financial well-being and easing the stress of your employees is also common sense. You want your employees to be happy, productive, stress-free, and focused on the job at hand. Offering student loan repayment assistance as an employee benefit could help with all of those factors.