Scary stat: If college tuition continues to rise at a rate of 6% each year, the cost of a private college education would be $500,000 in 18 years. For professionals with young children or those who are planning to become parents, that figure can be frightening.
In fact, financial stress can weigh on employees so much that it can cause anxiety and worry, which in turn can make them less productive at work. Helping employees save for college takes a huge financial burden off of their shoulders and lets them know that their financial stability is a top priority. And by helping to alleviate their worries, it can also help your bottom line.
Why it is important to help your employees save for college
Parents (and students) have listed worrying about college debt as their number one concern for four years straight, according to The Princeton Review’s 2018 College Hopes & Worries Survey. It’s probably because the same survey found that 63% of parents estimated the total cost of college to be more than $100,000.
How great would it be if you can help lessen this financial burden – one that is weighing on the minds of your employees? The good news is you can: by offering college savings assistance through your benefits package.
Employees are asking for benefits like this because:
- They give employees the ability to make more progress on their college savings and overall financial goals. Oftentimes, college savings takes a backseat to other more pressing financial obligations and retirement savings. Employers that offer contributions to 529 plans are illustrating that they are invested in the long-term financial wellness of their workforce.
- They offer a helping hand with a confusing concept – college financing. According to investment firm Edward Jones, 72 percent of American still don’t know what a 529 college savings plan even is. Offering a program that helps employees grow their 529 with regular contributions can encourage and inspire them to get started.
- They expect more support from their employers. Today’s talented workers are in the driver’s seat and can afford to be more selective when deciding which companies align with their values as well as offer the benefits that will support them in the short- and long-term. That’s why 69 percent of employers agree that they should take an active role in encouraging their employees to manage their personal finances better, according to a survey by Willis Towers Watson.
Why companies should offer this benefit
If you’re looking for a unique benefit to help set your company apart from competitors, and help employees with both their short- and long-term financial goals, consider offering college savings benefits. It’s an innovative benefit that not a lot of companies are offering right now, so it’s a unique opportunity to really stand out.
Gradifi’s College SaveUp solution makes it simple to get started helping employees save for college, and many companies are signing on.
How it works: The CSU Plan benefit enables companies to seamlessly make monthly contributions to an employee’s existing 529 college savings account. As an employer, by offering this benefit that your employees clearly want, but might be struggling with achieving on their own, you can help them achieve financial stability.
A college savings benefit gives you a competitive advantage
Besides being a nice thing to do for your employees, college savings benefit programs are a win-win for employers, too. Here’s why:
It’s great for talent recruitment. In a tight marketplace with low unemployment, having a unique benefits package is an important way to differentiate your company from other firms. It could be the very thing that attracts passive job seekers to explore your employer brand.
It’s a tool for retaining the employees you have. Ongoing perks like a college savings program can have a strong impact on employee engagement and satisfaction. In most cases, providing college savings programs like CSU or student loan repayment benefit is a much more valuable benefit than one-time perks like a small scholarship for the children of employees.
Less stressed employees are more productive. Did you know that 53 percent of employees in a Bank of America Merrill Lynch survey reported that stress over their finances interferes with their ability to focus and be productive at work? Employee benefits that include a financial wellness component (that includes college savings) can provide freedom from financial stress – and as a result, a more focused, engaged workforce.
As you evaluate your employee benefits and financial wellness offerings, consider college savings benefits. They offer a big return–a more productive and engaged workforce–for a relatively small investment.