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.
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