Whether you’re a small business owner or a hiring manager for a Fortune 500 company, getting millennials to accept your offer can be tough.
That’s because millennial expectations of the workforce are changing everything. As more companies offer work from home days, casual dress, and flex hours – not to mention free food and copious swag – it can be hard to compete.
But now, thanks to a bill that’s being proposed in Congress, you can.
Employer Participation in Student Loan Assistance Act
As of yesterday, Reps. Rodney Davis (R-Ill.) and Scott Peters (D-Calif.) introduced the Employer Participation in Student Loan Assistance Act.
This bill is proposing “to extend the tax exclusion for employer-provided educational assistance to include payments of qualified education loans by an employer to either an employee or lender.”
In other words, employers can help pay their employees’ student loans. What’s more, this bill enables up to $5,250 to be paid out by an employer annually pre-tax. If it passes, it will apply to student loan payments made after December 31, 2017.
3 reasons employers should offer student loan reimbursement
If you’re a cost-conscious or cash-strapped employer, you might be wondering why you should offer student loan reimbursement to your employees. Here are a few reasons you should consider it as an employee benefit.
1. Attract millennials to your company
If you’re hiring at all right now, chances are you’re looking at millennials. After all, they’ve already surpassed Gen X as the largest group in the American workforce, according to a Pew Research Center analysis.
As you compete against other companies for these hires, keep in mind that some large corporations are already paving the way on student loan reimbursement.
In fact, student loan refinancing company SoFi reported in 2015 that they saw “a 300% increase over the past two years in employer adoption of student loan assistance benefits.”
And, according to SoFi, a large variety of companies are making this offering:
“Our 650+ partnerships include not only Fortune 500 companies and top 100 law and consulting firms, but also increasingly a number of small startups and more traditional companies.”
And that was two years ago. As more and more companies offer this extra benefit, it’s becoming a growing commodity that may soon become a standard offering.
2. Increase employee loyalty
In a survey Student Loan Hero ran back in 2016, more than 15 percent of respondents wanted to be more fiscally responsible while another 14.6 percent wanted a better work/life balance.
That’s 30 percent of our respondents whose lives can be improved by a better benefits package in the workplace.
Since financial responsibility and student loan debt oppose each other, helping reduce this debt is one way you can ease your employees’ financial anxiety. And increase their loyalty.
When released their latest Employee Benefits Trends Study, they found that 62 percent of respondents were “looking to their employers for more help in achieving financial security through employee benefits.”
That could mean more than half of your employees are waiting for this next big work benefit to be offered. Or potentially looking for another employer who does.
3. Help solve the student loan debt crisis
Today’s number on national student loan debt is about $1.3 trillion. And nearly $1.3 billion of that is comprised of federal student loans.
Do you know how much of the total student loan debt isn’t getting paid? A whopping 11 percent.
If you add student loan assistance to your benefits package, you’re not just giving better benefits to your employees. You’re also helping the U.S. government battle an ever-increasing load of debt.
Don’t forget, the student loan debt crisis is still growing. And for the recent graduate earning an early-career salary and paying hundreds to thousands per month on their student loans, this bill can provide breathing room where it didn’t exist before.
Not every employer can pay their employees more money. Nor does every position have the growth to earn more.
But a bill like this empowers allows employers to ease their employees’ financial pressure. And it provides employers with a tax benefit to boot.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 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 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.23% 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 Month/Day/Year, 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 08/21/18. 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.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
3 Important Disclosures for SoFi.
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.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 6.23%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.95% – 6.37%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.32%6||Undergrad & Graduate||Visit Citizens|