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.
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