Although Millennials are most often cited for being slammed with crippling debt, actually, one in five adult Americans carry student loan debt, according to NBC News. This means your company’s newly graduated intern or your vice president could be one of those people.
Student loan debt doesn’t discriminate by age, race, sexual orientation, seniority, or intelligence. If you have it, you have the obligation to pay it back, which is a financial and mental burden on anyone, no matter his or her age or income. And the level of debt continues to rise. The average debt is up a staggering 302% in the past 14 years alone, according to a 2019 study.
So, what are companies doing to provide support to the large number of employees who are buried under the weight of this obligation? A growing number of employers—Aetna, Fidelity Investments, Estée Lauder, Staples and, now, Advance Financial—are pioneering the new benefit of loan repayment assistance programs.
In 2018, just 4% of employers offered this benefit, according to a Society for Human Resource Management (SHRM) survey. The number is growing sharply in 2019 with the primary goal of attracting and retaining top talent. Specific details of each company’s benefit vary. Here is a look at what Advance Financial has put in place.
Structuring the Repayment Program
After months of market research, Advance Financial introduced a student loan repayment program in which the company will contribute a significant amount (up to $12,000 over the course of 6 years) toward repayment of each employee’s student loan(s). The goal of the groundbreaking program is to help employees pay off loans more quickly, allowing them to focus on their careers, gain more financial freedom and, most importantly, have peace of mind.
Once an employee has completed 1 year with the company and is enrolled in the program, Advance Financial makes a sizable introductory contribution directly to the financial institution holding the employee’s student loan.
This is followed by standardized monthly installments as long as the employee continues to make the minimum installments and keeps his or her account in good standing. The payments incrementally increase yearly the longer an employee is with Advance Financial. The employee is under no contractual obligation to pay back the money if he or she chooses to leave the company at any time.
As of now, just 6 months into the launch of the program, 67 employees are already enrolled.
The Benefit that Existing and Potential Employees Crave
When talking dollars and cents, you might think that higher starting salaries would rank just as desirable as a student loan repayment program, but there’s something about helping pay an existing debt that really strikes a chord with employees.
Since the beginning of 2019, Advance Financial has experienced improved retention. These results correspond with national trends. A recent study found that 78% of employees would accept a job offer with student loan repayment assistance, and 85% said they would commit to staying at that job for 3 years.
While we are encouraged to know this benefit aids in workforce retention, our focus continues to remain on how we can go above and beyond in serving our incredible team of employees.
Building an on-site gym, providing 40 hours of paid time off to volunteer in the community, and keeping an on-site nurse and masseuse are just a few of the other ways we let our employees know that we care about their personal well-being, not just about their work performance.
Making student loan repayment a priority in our company was never a question of “why?” but “how?” We wanted to deliver in a manner that stood out! The relief and excitement seen on the faces of our employees when we personally announced the news assured us that our pursuit of excellence in providing the best cutting-edge benefits to our employees can truly change their lives.
|Ahnaf Bashir is Vice President of Human Resources at Advance Financial, specializing in Comp. & Benefits design administration, HR Operations Management, Strategy Development and Implementation, and Talent Management. Connect with Advance Financial on Twitter: @AF_247|