For most employees, benefits such as a 401(k) and health care plan are pretty much expected these days. But considering the growing burden of student loan debt on college graduates, traditional benefits aren’t that helpful when there’s little money left at the end of the month to participate.
That’s why an increasing number of employers are beginning to offer a new kind of benefit — student loan repayment help. While older workers tend to prefer conventional employer-sponsored benefits, young adults are making it clear that this innovative type of aid is exactly what they want.
Survey Finds Employees Want Help With Student Loans
High-profile companies such as Pricewaterhouse Coopers and Fidelity have recently announced they will offer student loan repayment assistance to employees. Clearly, there is a demand for this benefit — but how many people really want it?
We performed a survey of U.S. workers with student loans to find out how they’re balancing retirement savings with student loan payments and exactly how important repayment assistance is to them.
We found that out of workers who have student loan debt, only about half are contributing to a retirement savings account such as a 401(k) or IRA. It’s understandable, considering they probably can’t afford to save for retirement until that student debt is paid off.
It also turns out that while overall, employees prefer traditional benefits such as 401(k) matching and health care, younger workers who are just beginning the student loan repayment process would much rather receive student loan repayment benefits.
Finally, the majority of survey respondents said they would use the funds offered by an employer to make extra student loan payments rather than simply cover a portion of their monthly bills. That means this assistance could be worth much more than the dollar value — extra payments shorten the repayment period and help to avoid thousands of dollars in interest charges.
Read on for the full results of the survey.
2016 Employer-Sponsored Student Loan Repayment Assistance Survey: Full Results
Do you currently contribute to a 401(k), IRA, or other type of retirement account?
- Yes: 54.97%
- No: 45.03%
Age affected how many people contribute to a retirement account: 18-24: 33%; 25-34: 57%; 35-44: 66%; 45-54: 66%; 55-64: 60%
How important is it that a job offer includes student loan repayment assistance as a benefit?
- Extremely important: 21.52%
- Very important: 17.41%
- Moderately important: 23.22%
- Slightly important:15.16%
- Not at all important: 22.69%
Eighteen to 24-year-olds were more likely to choose “very important” than 25-34 year-olds (23% vs. 13%, respectively).
Assuming equal dollar value, which job benefit would you prefer: student loan repayment assistance or a 401(k) retirement plan match?
- Student loan repayment assistance: 45.78%
- 401(k) match: 54.22%
Age affected how many people preferred student loan repayment assistance over a 401(k) match: 18-24: 54%; 25-34: 45%; 35-44: 42%; 45-54: 39%; 55-64: 39%
Which job benefit would you prefer: a health care plan/insurance or student loan repayment assistance?
- Health care plan/insurance: 76.47%
- Student loan repayment assistance: 23.53%
Which job benefit would you prefer: additional vacation/paid time off or student loan repayment assistance?
- Additional vacation/paid time off: 47.31%
- Student loan repayment assistance: 52.69%
Complete the following statement: If I received student loan repayment assistance from my employer, I would use it to:
- Cover part of my current monthly payment: 35.66%
- Make extra payments: 64.34%
Survey was conducted via Google Consumer Surveys on behalf of Student Loan Hero from March 26-28, 2016, with a nationally representative sample of 1,763 adults age 18-64 living in the United States. The survey employed a screening question of “Do you have student loans” to limit responses to student loan borrowers only.
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