Posted on: August 6, 2024
Student loan repayment assistance is one of the top benefits many of your employees want. Some workers search for employers who offer student loan help when looking for a new job. Research shows that 86% of employees with student loan debts would commit to a company for five years if their employer provided repayment assistance.
Most employers would like to help employees pay off their student loans but aren’t sure how to offer this benefit. Here are five unexpected ways employers can help employees with student loan payments.
Use money on the table.
One simple and easy way employers are assisting employees with student loan payments is by offering Employee Choice—a student loan repayment benefit exclusively offered by BenefitEd. It’s designed to use funds employers already have set aside for 401(k) matching contributions.
The Employee Choice product allows employers to stretch their benefits budgets because they don’t have to adjust for money that’s already set aside for matching contributions. Employees can apply unused matching dollars to help repay their student loans. Or, they can split the matching funds to make a payment to their student loan debt and save the other part for retirement.
Each year, employees leave about $24 million in 401(k) matching funds on the table. Employee Choice offers a simple way to use existing funds to provide student loan payment relief for employees.
Provide information on loan refinancing.
Many people who take out student loans have a high interest rate. Instead of continuing to pay this rate for the lifetime of the loan, employers can help workers find different private refinancing options for their employees with student loans.
Sometimes people wonder whether refinancing is worth their time and effort. But on average, many borrowers take 20 years to pay off their student loan debts. Employers can work with BenefitEd and Nelnet Bank to start a program to support student loan refinancing. Even saving a small amount each month can lower the total cost they will pay over the life of the loan.
Trade in unused vacation days.
Every year, American workers use about 54% of their eligible vacation time. Only 23% of employees use all of their paid time off, and about 10% take no time off at all. Some employers are now encouraging employees to convert their unused vacation days toward a payment on their student loan debt. BenefitEd has flexible admin options to help employers explore other unique benefits to support their employees’ financial goals.
Help with kids’ college loans.
As college tuition costs continue to increase, many parents and grandparents are helping with these expenses, often taking out loans to cover them. Research shows that many workers in their 60s owe nearly $229 billion for college loans, or about $33,000 each. Most expect to make payments in their retirement years.
One way employers can assist older employees adding to their, or their family members’, educational goals is to provide funds to a college 525 savings plan. A 529 plan is a tax-advantaged savings plan that can help workers save money for their kids’ or grandkids’ college expenses.
Donate company shares.
Employers who give business stock options to employees with student loans may encourage them to convert the shares they receive toward a student loan payment. Helping employees who struggle with student loan debt find creative ways to shift the benefits they receive to juggle their financial priorities is one way employers can help them build a brighter financial future.
Get Started
Learn how to put BenefitEd products to work for your employees. Contact our expert team or request a demo today.