It’s not a secret that student debt is a burden for millions of Americans. Collectively, former students owe more than $1.5 trillion in loans, and as college costs rise, that number stands to climb.
But here’s a bit of good news for indebted Americans whose loan payments eat up more of their income than they can comfortably afford: A growing number of companies are offering help with student debt as part of their workplace benefits packages. And that’s something employees will no doubt come to appreciate.
If your company is looking to retain its staff, it pays to consider offering some form of student loan assistance. It could be just the thing that buys you the employee loyalty you’re after.
Giving Your Workers a Reason to Stay
In today’s healthy job market, it’s easier than ever for employees to jump ship and explore different opportunities. When that happens, you, as an employer, are left scrambling to fill open roles, all while spending time and resources on a process you’d probably rather avoid.
Rather than spend money on the hiring process, you might instead allocate some funds toward a benefit that’s likely to encourage employees to stay put. In fact, 86 percent of workers say they’d stay with a company for at least five years if their employer were to help pay down their student debt, according to advocacy group American Student Assistance.
Helping workers pay down their student debt might also help them better focus on their jobs and improve their output. In fact, 33 percent of workers say they’re distracted by personal financial issues at the office, to the point where it stunts their productivity. Alleviating that burden, at least to some degree, should give your employees one less thing to worry about, thereby allowing them to better concentrate when they’re supposed to be plugging away.
Another way you, as an employer, can help on the student debt front is educating workers with families on the importance of saving for college, and bringing in financial advisors to introduce them to the savings tools available to them. For example, 529 plans are a great way to save for college because earnings in those account aren’t taxed — but many people are still unfamiliar with 529 plans because they never had one when they were younger.
Talking to your employees about student loan refinancing or consolidation is another way to potentially help. Many people either don’t know that these options exist, or are afraid to pursue them for fear that they’ll somehow make their situations worse, so providing that education could really change some workers’ lives.
Americans of all ages are plagued by student loans, so if you’re looking to minimize the burden while taking steps to retain your staff, look at rolling out some sort of debt assistance program at your place of work. Chances are, you’ll find that it’s a worthwhile investment in more ways than one.
The views of the author of this article do not necessarily represent the views of Gradifi. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained here. Readers should consult their own attorneys or other tax or financial advisors to understand the tax, financial and legal consequences of any strategies mentioned in this article.