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We live in a new era that is still bound by past ideologies and ways of doing things. Businesses that do not adapt to today’s business styles and challenges will have trouble thriving in the future. Obviously, well-rested and emotionally happy people are the most productive. However, some businesses still measure employee productivity by the number of days off and the number of hours they spend in front of a screen, regardless of the type of work they do. It’s almost as if looking busy is more important than actually working. Other workers who have busy schedules and are focused on their current job will perform better with more rest.
The same philosophies apply to salary and benefits offers. Times have changed, and yesterday’s preferences do not reflect the full picture of today’s societal needs. Rest and emotional well-being lead to greater productivity, as well as financial stability. Achieving financial stability is more difficult when debt is the result of higher education required to find a job. An employee benefit that is gaining popularity is student loan repayment. Student loan repayment includes tax, employment and cultural benefits as employee benefits. Our vision at Spair is a world where student debt is not a lifelong burden.
Student Loan Repayment Benefit
To be eligible for a tax-deductible educational assistance program, certain requirements must be met. See the linked document to read the complete information provided by the IRS.
Time To Pass Tax Relief For Student Loan Repayment Benefits, Shrm Says
An educational assistance program is a separate written plan that provides educational assistance only to your employees. The program is only eligible if all the tests below are met.
If the employee is not in the top 20% of employees ranked by salary for the previous year, you can ignore test (2).
An ASA (American Student Aid) survey found that 86% of recent graduates would make a long-term (5-year) commitment to an employer that helps pay off their student loans. It also found that student loan repayment as an employee benefit was the third most important benefit to those surveyed, after health insurance and 401k packages. However, 74% of respondents did not receive a student loan payment as a discount.
Benefits that attract and retain talent are in the financial interest of the business. Another CAP (Center for American Progress) study shows that employee turnover replaces 10-30% of an employee’s salary. These percentages also increase with position and total compensation.
Advance Financial Adds Student Loan Debt Benefit
Offering student loan repayment as an employee bonus is a way to reduce churn in a highly competitive job market and make your job more attractive.
Student loans are an increasing burden with a CAGR of around 11%. Your employees took out student loans to help them get the qualifications they needed to work for your business. Improving the financial health of your employees improves society, and helping them get out of debt is one way to do that. It’s also no surprise that it will have a direct positive impact on your business. You will have staff willing to work hard for your organization because you value them and the needs of their families.
Student loans are the second largest form of household debt after mortgages. Student loans were first offered in 1958 under the National Defense Education Act. More than 44 million Americans currently have $1.73 trillion in student loan debt. In 2019, 69% of students took out an average of nearly $30,000 in loans each. You are probably in close contact with people who are facing this burden.
Spair is the easiest way to add student loan payments to your employee benefits package. Our software can get your business up and running with an educational assistance package in minutes. CloseText by Caroline Hroncich Caroline twitter chroncich1 CloseText Amanda Schiavo on Twitter schiavoamanda mailto Amanda.Schiavo@arizent.com linkedin amanda-schiavo-3b56736a Jul 27, 19 2019:59 pm EDT 2 min read
Student Loan Repayment Benefits Are Growing In Popularity
LAS VEGAS. Advisers looking to sell voluntary benefits to their clients may want to consider products that help employees manage financial stress.
Cathy Ott, director of work experience at M3 Insurance, says voluntary benefits are attractive assets that employers want to add to their packages, including student loan repayment benefits that are voluntary options.
“This market is exploding,” he said Monday, speaking at the employee benefits consultant’s Workplace Benefits Mania conference. “Student Loan Repayment â A Growing Trend.”
The number of employers offering student loan repayment has doubled in the past year, according to the latest data from the Society for Human Resource Management. Employers including Travelers Insurance, Wayfair and New Balance offer employee benefits. One of the first adopters, PwC, has paid off nearly $26 million in student debt since the program launched in 2016.
Number Of Employers Offering Student Loan Repayment Benefit Grows
Focusing on student loan repayment is just one way employers are focusing on offering more holistic financial benefits, said Heather Garbers, vice president of voluntary benefits and technology at HUB International Insurance Services. Health used to be the focus, but employers are now focusing on other aspects of employee health, including financial health.
“Now we’re finding part of making sure employees are healthy is making sure they’re healthy as a whole person,” he said. “There is a unique opportunity in voluntary payments to be more strategic about our offerings.”
New benefits also mean new management systems. Ott said advisors need to know where to meet with clients when implementing benefits technology. If employees are used to face-to-face consultations before open enrollment, they may not be as eager to immediately switch to online self-service options.
“Our job as advisors and consultants is to deploy the strategy to where they need and want to be,” he said. “It has to be gradual, this band-aid cannot be ripped off.”
Companies Raise Perks To Repay Employees’ Student Loans
At the same time, data suggests that employers may need more modern technology. Nearly 70% of employers believe their HR systems are inadequate for today’s workforce, and only 9% believe their company’s HR technology meets expectations.
Consultants should think about the type of technology tools they offer clients and how those tools can be used by multiple generations of employees, Ott said. Although one Penn State University graduate received a 75% discount on tuition at Happy Valley. still facing $39,000 in student debt.
In six months, Victoria Gibraltar received a bachelor’s degree in security and risk analysis, got a job as an IT management development specialist at Aetna Inc. and moved to Connecticut and then to Pittsburgh. He will soon begin making monthly payments on his federal loans in addition to his daily expenses.
While Pennsylvania has the 2nd highest average student debt in the nation, Gibraltar’s situation is not much different than the 44 million Americans struggling with student loan debt. higher education is more affordable and accessible.
Faqs About Student Loan Repayment Benefits
Aetna will match eligible full-time employees up to $2,000 per year in co-payments up to $10,000 or up to $5,000 per year for part-time employees up to $1,000 per year.
“It’s a very large sum,” says Gibilterra, who accepted the job offer before the insurer announced the program. “I’m applying for it on January 1st.”
Aetna spokesman Matthew Clyburn estimates that as of December 2013, up to 4,000 workers have received diplomas and may be participating in the program.
According to the Institute for College Access and Success, seven in 10 seniors (68%) who graduated from public and for-profit colleges in 2015 had student loan debt, an average of $30 per borrower. This is 4% more than the average debt of 2014 graduates.
Employers Helped Pay Off Student Loans For 4% Of Workers â And The Ones Who Make The Most Money Were Most Likely To See Relief
Meanwhile, only 4% of employers offered student loan assistance in 2016, down from 3% in 2015, according to a 2016 study by the Society for Human Resource Management.
Aetna joins the ranks of smaller companies such as PwC, Fidelity and Staples in making monthly payments directly to participating credit companies. Experts see this advantage as a key tool in attracting and retaining millennials.
The company offers $200 a month to workers without limits, an unusual practice since most companies with similar programs cap payouts at $10,000.
“$100 a month is kind of standard,” said Catesby Perrin, vice president of business development at SoFi. “This market is still relatively unknown. “Employers want to limit their exposure to some degree.”
Student Loan Repayment As An Employee Benefit
While SoFi deviates from the norm, the company understands student debt better than the average employer. SoFi works with more than 600 customers to facilitate and develop best practices for student loan relief, such as monthly scholarships and refinancing options.
By the end of 2016, Perrin says, more than 40 clients will be making student loan payments to their employees, and he expects that number to grow.
“Politics and perceptions have changed a lot in the last three years
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