With 44 million Americans holding over $1.5 trillion in student loan debt, it’s no surprise employers ask us about student debt benefits. We usually talk in terms of millennials; however, as an Employee Benefits News article points out, more and more moms and dads are eager for help to repay loans for their kids’ education.
Fortunately for employers that want to address this growing interest, there’s a range of alternatives available:
- REFINANCING via a marketplace platform or single partner allows individuals to find better rates for student loans. While attractive to employers due to the minimal cost, refinancing may be reserved for those with high credit scores and could lead to the loss of some protections available under federal loans.
- REPAYMENT PROGRAMS are typically extended to all employees and they can carry a high price tag depending on the amount of the repayment. Under this approach, employees continue to make the minimum monthly payment. By doing so, they qualify for the employer contribution to further pay down their loan. Employers have a great deal of flexibility available to them as to the design of the repayment program.
- ASSESSMENT TOOLS help employees understand various options available to them such as consolidation, refinancing and repayment. This low-cost option is usually available to all employees.
Although employers usually consider student debt assistance a recruitment and retention tool, there are other advantages. Mercer's Inside Employees' Minds™ Financial Wellness survey found that on average, employees spend more than 150 hours of work time a year worrying about money. It also found employees who have access to financial wellness programs report higher levels of trust and satisfaction with their employer.
With no end in sight to this massive student debt problem, we think debt assistance is worth considering. You may have more employees who could benefit than you thought.