Imagine adding $100 to your monthly student loan payment. That bump could shave years and thousands of dollars of interest off the life of your loan. But if you don’t have room in your budget for extra student loan payments, your job might be able to help you out.
Student loan repayment assistance is a work benefit where your employer makes additional payments on your student loans. Though the benefit is relatively rare, more companies are catching onto this trend of helping employees repay student loans.
As U.S. student debt swells to over $1.4 trillion, employees of all experience levels are welcoming this benefit. But if your company hasn’t started offering it yet, don’t wait for HR to start the conversation.
5 reasons your job should help pay student loans
1. Competitors already offer student loan repayment assistance
With more companies helping employees pay student debt, your employer should consider the benefit if they want to stay competitive.
Four percent of companies offered student loan repayment assistance in 2015, according to a report from Willis Towers Watson. That amount is estimated to leap to nearly 20 percent by 2018.
The work benefit is in high demand, too. A 2016 survey from Student Loan Hero found that 62 percent of respondents believe student loan repayment assistance is at least moderately important in a job offer.
If your company doesn’t want to lose you to a competitor, maybe they’ll add the perk.
2. The company will save time and money on talent
If student loan repayment assistance can keep you on board, chances are it’ll attract new talent that wants to stick around.
Hiring isn’t cheap. The Society for Human Resource Management estimates the typical cost for a hire is $4,129. And it takes 42 days to fill a position.
Meanwhile, a February 2017 survey from American Student Assistance reported that 86 percent of professionals would commit to a company for a half-decade in exchange for student loan repayment assistance.
With a lower rate of turnover among employees with student loans, your employer could save a lot of money. Take healthcare company Cigna for example. For every dollar it spent on its tuition reimbursement program, it got its dollar back and saved an additional $1.29 in talent management costs, report the Lumina Foundation.
3. The benefit may decrease stress and increase productivity
If employees are burdened with student loans, chances are they’ll bring that stress into the office. And with stress comes lower productivity.
But offering student loan repayment assistance may actually increase productivity. In a 2016 survey by IonTuition, 90 percent of 412 manager-level employees believe student loans cause workplace stress. And about 70 percent believe offering student loan repayment assistance would improve morale and employee retention.
Lower stress and higher morale and productivity are undoubtedly a recipe for success.
4. Setting up the benefit won’t take long
Sure, student loan repayment assistance can help your company save money by increasing employee retention and work productivity. But how much will the work benefit cost to set up?
Turns out, setting up the benefit may not be as cumbersome as HR might suspect.
More business-to-business services such as SoFi at Work and CommonBond for Business offer a student loan management platform. Companies can offer to help employees refinance their student loans or contribute directly.
With help from a trusted finance company, your employer can easily get this work benefit off the ground. Best of all, once the work benefit is setup, employees will be able to sign up within minutes.
5. Student loan repayment assistance may one day be tax-free
There may be a reason why more companies offer tuition reimbursement and only a small group offer student loan repayment assistance. The former offers a tax benefit to employers.
But Congress is now considering a law that would “extend the exclusion for employer-provided educational assistance to employer payments of qualified education loans.” That would mean employers could offer student loan repayment assistance tax-free.
The Employer Participation in Student Loan Assistance Act, or H.R.795, was introduced in February 2017. If enacted, employers will be able to offer this work perk tax-free starting in 2018.
Asking for student loan repayment assistance
These five reasons can help you get the conversation started at your workspace. Take care of how you deliver the spiel, though.
The goal is to empower your boss, HR rep, or company leader with information. It’s not to stomp your foot and demand change. Relaying your personal story in addition to data can go a long way.
Similarly, getting your coworkers on board before talking to management may seem like you’re ganging up. If you know other people in your office are struggling with student loan debt, ask for permission to speak on their behalf.
Unlike a 401(k), it can still be taboo to talk openly about your debt. Understand that not all of your colleagues will benefit from this type of work benefit. Nevertheless, if an employer-student loan repayment program is important to you, then speak up. Seeing extra payments on your student loans might be in your future.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|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 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% 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 firstname.lastname@example.org, 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
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
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.
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.
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 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.57% – 6.97%1||Undergrad & Graduate|
|2.47% – 6.99%3||Undergrad & Graduate|
|2.68% – 8.77%4||Undergrad & Graduate|
|3.24% – 6.66%2||Undergrad & Graduate|
|2.61% – 7.35%5||Undergrad & Graduate|
|3.01% – 9.75%6||Undergrad & Graduate|