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 those education loans are 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.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.54% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of March 18, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 0318/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.5% effective February 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.54% – 7.12%3||Undergrad & Graduate|
|2.54% – 7.27%1||Undergrad & Graduate|
|2.67% – 8.96%4||Undergrad & Graduate|
|3.23% – 6.65%2||Undergrad & Graduate|
|2.69% – 7.43%5||Undergrad & Graduate|
|2.98% – 9.72%6||Undergrad & Graduate|