For borrowers with student loans, these debts are a common source of financial stress. But getting student loan repayment help from employers could be a financial lifeline with the potential for huge worker benefits.
A new survey from HR consultancy Aon Hewitt found that 54 percent of workers with student loans spend time at work dealing with financial tasks, more often than those without student debt.
Student loans also made workers less likely to participate in an employer-sponsored retirement plan. They also worry more about money and say debt is ruining their lives.
Workers and employers should both be aware of how student loans can negatively impact productivity.
“If [employees] are stressed out about their student loans, they are likely carrying that into the workplace,” says Heather Tredup, a partner at Aon Hewitt. “That’s going to affect their overall productivity.”
Work perks that provide student loan repayment help
Fortunately for today’s workers with student loans, more employers are considering benefits that include student loan repayment help.
And this fits in with what workers want. A recent Student Loan Hero survey found that more than 60 percent of workers say student loan repayment benefits are important to them.
Consider asking your employer to start offering certain student loan assistance benefits. Or, look for these benefits in your next employer.
And if you’re smart about your existing benefits, you can find ways to leverage them as assistance paying student loans.
1. Student loan payment assistance
While some companies currently offer student loan repayment assistance, this benefit is still fairly rare.
However, “I think we’re finding more employers starting to look at what’s out there, and what options will really help,” Tredup says.
Employer-provided student loan repayment assistance are work benefits that offer extra pay towards student debts. Typically, this student loan repayment help is given through one-time or ongoing payouts to the employee or their student loan servicer.
2. Financial education
Employers are also starting to see more value in providing workers with financial education and resources to help them manage their money more responsibly.
These can include financial workshops, webinars or online classes. Or even access to financial counseling or planning.
“[For] a lot of new people entering the workforce, that is a barrier for people is understanding how to budget, how to handle various bills,” Tredup says.
Financial literacy programs can help workers “make a plan to pay down student debt,” Tredup adds.
3. Tuition reimbursement or education stipend
Employers see a clear benefit to workers with more training, education, and skills. So it makes sense to offer tuition reimbursement or educational stipends to workers looking to get more education.
In fact, that might be why this benefit is so common. 61 percent of organizations offered undergraduate educational assistance and 59 percent offered graduate educational assistance, according to a 2013 report from the Society for Human Resource Management.
And workers should definitely consider taking advantage of tuition reimbursement benefits. These can be especially beneficial to workers who have student loans but haven’t completed a degree. With an employer covering tuition costs, returning to school will be much more affordable.
4. Annual or sign-on bonus
Work benefits don’t have to be directly related to education to still be useful to help you tackle student loans.
A great student loan repayment strategy is to use extra earnings, such as sign-on or annual bonuses, to pay down this debt.
“Some employers are even considering a student loan signing bonus,” Tredup explains. “So that when someone comes in, instead of giving the bonus to the individual it might be applied to the loan.”
5. Overtime opportunities
In addition to bonuses, working overtime can also be a way to easily increase your income.
If your employer offers overtime, take advantage of those opportunities and offer to work late. This could have the added benefit of showing how dedicated you are to your work.
When you’re getting paid time-and-a-half for overtime work, this will quickly rack up extra earnings. To make sure your hard work pays off, use that overtime income to make an extra payment toward student debt.
6. Payroll advances or loans
In addition to providing extra pay, some employers offer loans or payroll advances to help employees when finances get too tight.
In fact, that same report from the Society for Human Resource Management found that 19 percent of employers offered payroll advances. Others might also offer low- or no-interest loans to employees.
Of course, going into debt when you already have debt doesn’t make a lot of sense. But if you’re ever in a tight financial position and at risk of missing a student loan payment, these flexible pay options can be a lifesaver.
7. Employer-matched retirement savings
Finally, employer matches for retirement account contributions are a huge benefit that more student loan borrowers could be benefitting from. Especially since student loans can set workers back on retirement savings.
An employer match can help you keep retirement savings on track without having to devote a giant chunk of your pay to your 401k. This means you can both save for retirement and work on paying off student loans. Plus, it’s free money, which is always good.
Tredup suggests starting small with retirement savings, with as little as you can afford.
“Don’t wait until you can afford to contribute the full matched amount,” Tredup says. “Even saving one percent, you could still benefit from the employer match.”
If you’re not sure what benefits you have, check with your employer or human resources department. They can help you review your benefits package and identify perks you’re not yet using or might not even know about.
With any luck, perhaps there will even be a way your employer can help you target student loans and pay them down faster. Hey, if you don’t ask, you don’t get.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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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 3.36% APR (with Auto Pay) to 7.82% APR (with Auto Pay). Variable rate loan rates range from 2.41% APR (with Auto Pay) to 6.99% 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 April 17, 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 04/17/2019. 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 firstname.lastname@example.org, or call 888-601-2801 for more information on our student 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 SoFi.
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.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
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 2.45% effective May 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.41% – 6.99%1||Undergrad & Graduate|
|2.41% – 7.89%2||Undergrad & Graduate|
|2.43% – 6.65%3||Undergrad & Graduate|
|2.38% – 6.81%4||Undergrad & Graduate|
|2.41% – 8.19%5||Undergrad & Graduate|
|2.60% – 9.60%6||Undergrad & Graduate|