From 2018 to 2019, the number of employers offering financial aid for student loans shot up from 4% to 8%, the Society for Human Resource Management’s 2019 Employee Benefits (PDF) survey finds. In contrast, that percentage rose from 3% in 2015 to 4% in 2016 and remained flat at 4% the following two years.
“Employers understand that education is a priority,” an executive summary of the survey notes. “More than half (56%) of employers offer tuition assistance for employees pursuing degrees and student loan repayment assistance…”
Outstanding college student loans now stands at $1.6 trillion and impacts Americans more than credit card and auto debt, CNBC reports. Tennessee-based insurer, Unum, offers its employees the opportunity to trade up to five days, or 40 hours, of unused vacation time and apply that towards their loan balance via its Student Debt Relief Program.
“If I were a young employee and I had that benefit, I’d be stoked,” says David Reid, CEO of Ease, a benefits administration company based in San Francisco. About one-third of adults age 18 to 29 report having student loan debt, and for those with a bachelor’s degrees or higher, that number zooms up to 49%, Pew Research Center reports.
Blue Cross Blue Shield of Massachusetts, in November, added a student loan repayment benefit where the health insurer forks over $75 a month for their workers’ student loans, Human Resource Executive reports. The program also gives employees one-on-one financial mentoring and guidance on how to pay down the outstanding debt.
“We are always soliciting opinions from employees about the issues that matter to them, so we know student loan debt is a serious burden,” says Sue Sgroi, Blue Cross’ chief human resources officer. “In addition to easing the burden of debt on our current employees, we believe our commitment to unlocking financial freedom will help us attract and retain top talent.”
Hartford and Sotheby’s this year also started making contributions to their employees’ student loans, while Montefiore St. Luke’s Cornwall, a non-profit community hospital, permits it workers to use their unused paid time off to pay off loan debt. Trilogy Health Services, a senior care provider, earlier in the year boosted its student loan aid benefit, from paying $250 a quarter toward loan principal to now paying $100 a month.
“That debt is scary—it delays home-buying, it delays getting assets—it slows people’s ability to feel like they’re making a way for themselves,” says Todd Schmiedeler, senior vice president of foundation and workforce development at Trilogy Health Services. “If we want our employees to be great and to take care of our residents… they have to feel cared about, too.” Another company, Ally Financial, is coming out with new benefits for its 8,500 employees in early 2020, including paying $100 a month towards student loans with a lifetime cap of $10,000, Employee Benefit News reports.
“We look for what we can do to modernize our benefits,” says Kathie Patterson, chief human resources officer at the firm. “We know it helps us to attract, retain and engage our workforce.”
But while employers may be tempted to jump on the student loan aid bandwagon, companies should make sure such a benefit makes sense for their current staff and future recruits, Lydia Jilek, senior director of voluntary benefits at Willis Towers Watson, tells Society for Human Resource Management.
"Employers hear the buzz about brands offering student loan benefits and think they need to follow suit,” Jilek says. “But don't do this just because it's the next hot thing. Assess first if it's critical to your employees and prospects."
A survey Jilek’s group did in 2018 on emerging trends for employer benefits found that 35%, 34% and 32% of employers offered student loan refinancing, student loan consolidation and contributed to paying off these loans by 2021, respectively.