Attract and Retain Talent With a Student Loan Repayment Benefit
The majority of today's students graduate from college with student loan debt, and juggling the payment with other living expenses can be difficult. That's why some employers now offer a student loan repayment benefit. In a tight labor market, this can be a strong tactic for recruiting and retaining top talent.
The benefits to employers
No matter your industry, your hiring staff probably needs to compete for the best candidates. In-demand applicants often have more than one job offer, and they'll weigh both salaries and benefits when making their decision.
A student loan repayment benefit can help you attract high performers to join your team—and not just the younger ones. Many college graduates are still repaying loans well into their 40s. Talented employees who started their higher education journey later in life will also appreciate this perk.
Offering this benefit can help you retain employees, too. High turnover costs time and money. By helping employees manage their student loan debt, you can boost their job satisfaction, engagement and commitment to the company.
Student loan repayment benefits can also improve employee wellness by helping reduce stress. Many people have to choose between saving for retirement or paying off their student loans. With their loan payment burdens lessened, employees can start saving for the future faster, curbing some of their anxiety around money.
How it works
As an employer, you can tailor a student loan repayment program to the needs and interests of your workforce. One simple method is adding the payment amount to an employee's check. Some companies choose a monthly benefit cap, such as $150 or $200.
Another option is a payment match, similar to a 401(k) match. Under this benefit, the employee continues to make regular payments, while the employer makes matching payments that are applied to the loan principal. This method can take years off the loan repayment plan.
Alternatively, you might choose a partner that helps employees refinance the loan to save money. This process often offers incentives that are better than if an employee had refinanced on their own, and it typically comes at no cost to the employer.
Like any benefit you offer your employees, it's important to investigate and choose good vendor partners.
Related services to consider
Helping employees manage debt is often part of an employer's total financial wellness package. Increasingly, companies aren't just offering employees a way to earn a paycheck—they're offering help with managing it, too. Financial counseling can complement a student loan repayment benefit. Through workshops or one-on-one meetings with advisors, employees get tips on how to make good decisions with their money, such as setting goals and budgeting.
Employees who feel financially strong will be better equipped to manage their day-to-day finances and save for the future. This translates into work life by reducing money worries that could affect a person's attitude and productivity. Remember, employees come to work as their whole selves. By addressing some of their concerns about debt with a student loan repayment program, you help employees focus on their jobs instead of finances.
Financial insights for your business
This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.