Student loan debt weighs heavily on the collective American mind—with good reason. According to MarketWatch, the total outstanding student loan debt as of January 2016 was $1.2 trillion, exceeded only by mortgage debt. It also reports that about 70% of recipients of bachelor’s degrees graduate with debt.
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These are interesting statistics. But ask a graduate (or the parent of a graduate), and the personal impact becomes apparent. Student loan payments combined with spiraling housing costs are severely limiting the ability of Millennials to move forward with their lives. Living in parents’ basements is more than just a stereotype.
One key to solving the problem of student loan debt may be in the boss’s hand. Traditional tuition reimbursement can help avoid debt in the first place. And now, some companies are utilizing a new benefit, student loan repayment.
Tuition reimbursement shows positive ROI
While tuition reimbursement is not new, its return on investment (ROI) has been a little murky. Recently, Cigna Corporation decided to attempt to quantify its impact on the company. With help from Accenture and Lumina Foundation, which focuses on postsecondary education, Cigna conducted an analysis that showed remarkable results from tuition reimbursement.
For every dollar the company put into their tuition reimbursement program, Cigna says they generated $1.29 in savings, or a 129% ROI.
The study was needed because very few organizations have closely examined the impact of tuition reimbursement programs—even though about 60% of employers offer them. These organizations typically invest about 10% of their learning and development budgets on tuition assistance, but only 2% to 5% of them evaluate their ROI.