For borrowers with student loans, these debts are a common source of financial stress. But getting help with repaying student debt, such as a student loan repayment bonus, from employers could be a financial lifeline with the potential for huge worker benefits.
In a 2017 survey of workers ages 22 to 33 by the nonprofit American Student Assistance (ASA), 86% of respondents said they would commit to work for a company for five years in exchange for help with paying off their student loans. And 93% said they would take advantage of a student loan repayment bonus provided by a prospective employer.
Workers and employers should both be aware of how student loans can negatively impact productivity. Education debt can make workers less likely to participate in an employer-sponsored retirement plan, and these workers tend to worry more about money.
“If [employees] are stressed out about their student loans, they are likely carrying that into the workplace,” said Heather Tredup, a partner at Aon Hewitt, a human capital and management consulting firm. “That’s going to affect their overall productivity.”
Let’s look at some of these benefits:
- Student loan repayment assistance
- Financial education
- Tuition reimbursement or education stipend
- Student loan repayment bonus
- Overtime opportunities
- Payroll advances or loans
- Employer-matched retirement savings
Work perks that provide student loan repayment help
Fortunately for today’s workers who have student loans, more employers are considering benefits that include student loan repayment help.
This fits in with what workers want. The ASA survey found that more than half of younger workers say student loan repayment benefits are a priority, falling third on the list after health insurance and 401(k) match benefits.
Consider asking your current employer to start offering certain student loan assistance benefits, or look for these benefits in your next employer. If you’re smart about your existing benefits, you can find ways to leverage them as assistance in paying student loans.
Here are some work perks that can help you with student loan repayment:
A small number of companies — about 8% — offer student loan repayment assistance, according to a 2019 survey by the Society for Human Resource Management (SHRM). While this benefit remains relatively rare, the number of employers offering it has doubled since the year before and continues to gain popularity. In fact, Forbes called it “the hottest employee benefit of 2018.”
“I think we’re finding more employers starting to look at what’s out there, and what options will really help,” Tredup said.
Employer-provided student loan repayment assistance is a work benefit that offers extra pay toward student debt. Typically, this student loan repayment help is given through a one-time or ongoing payouts to the employee or their student loan servicer.
In one unusual option, an insurance company called Unum offers to help pay student loans in exchange for employees giving up a certain number of vacation days.
Employers are also starting to see more value in providing workers with financial education and resources to help them manage their money more responsibly. Options 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 said. Plus, she added, financial literacy programs can help workers formulate a plan to pay off student debt.
Employers see a clear benefit to workers who have more training, education and skills. So it makes sense to offer tuition reimbursement or educational stipends to workers who are looking to get more education.
In fact, that might be why this benefit is so common. According to the 2019 survey by SHRM, more than 56% of employers offered tuition assistance.
Workers should definitely consider taking advantage of tuition reimbursement benefits. These can be especially beneficial to those who have student loans but haven’t completed a degree. With an employer covering tuition costs, returning to school will be much more affordable.
Work benefits don’t have to be directly related to education to still be useful to help you tackle student loan debt. A great student loan repayment strategy is to use extra earnings, such as a signing or annual bonus, to pay down this debt.
“Some employers are even considering a student loan signing bonus,” Tredup said. “So that when someone comes in, instead of giving the bonus to the individual it might be applied to the loan.”
One example is marketing services company Connelly Partners, which offers new employees a $1,000 student loan repayment bonus upon signing.
Working overtime can be another easy way to increase your income. If your employer offers overtime, take advantage of the opportunity 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, you will quickly rack up extra earnings. To make sure your hard work pays off, use that overtime income to make an extra payment toward your student debt.
In addition to providing extra pay, some employers offer loans or payroll advances to help employees when finances get too tight.
In fact, the 2019 SHRM survey also found that 15% 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.
Employer matches for retirement account contributions are a huge benefit that more student loan borrowers could be benefitting from — especially since student debt can set workers back on saving for retirement.
An employer match can help you keep retirement savings on track without having to devote a bigger chunk of your pay to your 401(k). This means you can save for retirement and work on paying off student loans. Plus, it can pay off to invest rather than pay down student loans first.
Tredup suggested starting small with retirement savings, putting aside as little as you can afford.
“Don’t wait until you can afford to contribute the full matched amount,” Tredup said. “Even saving 1%, 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.
Perhaps there will even be a way your employer can help you target student loans and pay them down faster.
Katherine Gustafson contributed to this report.
Interested in refinancing student loans?Here are the top 9 lenders of 2021!
|Lender||Variable APR||Eligible Degrees|
|1.88% – 6.15%1||Undergrad & Graduate|
|1.88% – 5.64%2||Undergrad & Graduate|
|2.50% – 6.85%3||Undergrad & Graduate|
|1.89% – 5.90%4||Undergrad & Graduate|
|2.25% – 6.39%5||Undergrad & Graduate|
|1.88% – 5.64%6||Undergrad & Graduate|
|1.90% – 5.25%7||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|2.13% – 5.25%8||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of June 1, 2021.
2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Interest Rate Disclosure
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.59% APR to 5.79% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.88% APR to 5.64% APR (excludes 0.25% Auto Pay discount). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 36% (the maximum allowable for these loans). Earnest variable interest rate student loan refinance 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 2.04% and 5.8% to the one month LIBOR. Earnest rate ranges are current as of 6/8/2021, and are subject to change based on market conditions.
Auto Pay Discount Disclosure
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.
Student Loan Refinancing Loan Cost Examples
These examples provide estimates based on payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 5.89% APR would result in a total estimated payment amount of $17,042.39. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 6.04% APR would result in a total estimated payment amount of $17,249.77. Your actual repayment terms may vary.Terms and Conditions apply. Visit https://www.earnest. com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit earnest.com/licenses for a full list of licensed states. For California residents (Student Loan Refinance Only): Loans will be arranged or made pursuant to a California Financing Law License.
One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries are not sponsored by or agencies of the United States of America.
© 2021 Earnest LLC. All rights reserved.
3 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. 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 0.15% effective Jan 1, 2021 and may increase after consummation.
4 Important Disclosures for Laurel Road.
Laurel Road Disclosures
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.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of April 29, 2021. Information and rates are subject to change without notice.
5 Important Disclosures for SoFi.
Fixed rates from 2.74% APR to 6.74% APR (with autopay). Variable rates from 2.25% APR to 6.39% APR (with autopay). All variable rates are based on the 1-month LIBOR and may increase after consummation if LIBOR increases; see more at SoFi.com/legal/#1. If approved for a loan your rate will depend on a variety of factors such as your credit profile, your application and your selected loan terms. Your rate will be within the ranges of rates listed above. Lowest rates reserved for the most creditworthy borrowers. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license #6054612; NMLS #1121636 (www.nmlsconsumeraccess.org). Additional terms and conditions apply; see SoFi.com/eligibility for details. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
6 Important Disclosures for Navient.
7 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.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 04/07/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.95% APR – 7.63% Fixed APR with AutoPay.
8 Important Disclosures for PenFed.
Annual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.89%-4.78% APR and Variable Rates range from 2.13%-5.25% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.