Let’s look at a fast-growing trend in corporate benefits of helping employees who are saddled with education-related debt. Today, we outline the main design elements that will structure leadership’s approaches to the perk.
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As the popularity of student loan assistance programs—from counseling to repayment—continue to gain favor among employers seeking to broaden their appeal as an employer of choice—companies also are testing the best ways to offer it.
Randall Abbott, senior strategist and a North American leader in the health and benefits practice of Willis Towers Watson, finds that employers are expanding their financial well-being offerings to include student loan assistance programs in the following ways: student loan counseling; student loan consolidation; student loan repayment matching; or student loan repayment assistance.
Putting a Plan Together
No one design exists for all of these arrangements; however, there are some typical attributes that they all share, benefits experts point out. Among the program design decisions to be made include:
- Eligibility, which could be based on employee tenure, age of the loan or other criteria. Some employers are even expanding eligibility criteria to allow employees to use the benefit for student loans they’ve taken out for their children.
- Frequency of payment (monthly, quarterly, or annual lump sum).
- Caps on total benefits (annual or lifetime).
- Reimbursement requirements, if the employee leaves the company within a certain amount of time after receiving the benefit.
When employers offer a package in which student loan repayment benefits are a key feature but not the only option, they can choose to offer:
- Information and counseling on how to manage student loan debt for the employees themselves or their children.
- Access to a student loan refinancing platform that allows employees to shop among different lenders.
- Subsidized student loan refinancing.
- Direct contributions to help repay student loans.
In the end, finding a balance between controlling costs while attracting and retaining talent may be tricky, but employers seem more willing to explore and navigate successful ways to offer the perk.
One far-reaching reason: Student loan assistance programs can “infuse a halo effect and general brand lift to the whole organization,” says Abbott, “so they benefit and attract even those without student debt.”