No firm would be ready to give away benefits without a reason to uphold. As students take nearly 10 years to repay their educational loans, paying off $50-$100 can help the employees to move out of their debts at the earliest. A few of the benefits that companies offering student loan repayment assistance offers is as given below.
Fresh talent recruitment is one of the biggest advantages of Student Loan Repayment Assistance. Employers can thus get the recent college grads to work for them. Repayment Assistance being a promising option helps employees to drive the best fresh talent into the company.
The company’s 401(k) plans are usually partaken by the recent graduates. There are also tax benefits when thresholds for 410(k) participation’s thresholds are met, companies receive tax benefits.
By relieving the financial burden, employees feel a little less stressed. This in-turn would help them in working better. Thus loan repayment assistance is a booster for employee productivity.
Student loan repayment assistance can also reduce the domino effect, of criticisms regarding student loan debt. Stories of student loan debt can sometimes even prevent aspiring students from attending college. However, if promising stories regarding the repayment assistance from the current employer is shared, that would only motivate students to take up courses without the fear of loan repayment.
Alternative to Student Loan Repayment Assistance
Though loan repayment assistance is highly popular among the employees and hence drives several employees into the company, bearing the costs of student loan repayment wouldn’t be easy for all the employers. In order to create a tight budget program, you can make the repayment-program, a competitive event.
This program would thus become available on a competitive basis, wherein the employees apply for the program based on the credits of work that they have obtained. If budget is not an issue, the program can be kept open to all the employees who are highly in need of financial assistance for their loan repayment.
If not for the company-level application of the program, the competitive option is good for foundations and non-profits organizations who want to add a loan repayment assistance program. More than the employees of a single company, community programs can aim at granting repayment assistance to those who are into a particular profession, geographical area or more. The requirements can be narrowed based on the foundation’s focus of concern.
Success stories of Student Loan Repayment Assistance by Employers
There are several companies which successfully attract fresh talent by detailing on Student Loan Repayment Assistance. Rise Interactive is a Chicago Based Digital Marketing Agency, which offers Student loan Repayment Assistance to 233 employees almost a year ago. The average age of the company’s employees is 27 and most of them couldn’t afford to pay for the 401(k) plan, as much of their funds went into paying off their student loans.
Understanding the scenario Raise offered $50 per month to its employees because they wanted to mark the response from the employees, regarding the introduction of the program.
Surprisingly on the very first day of introduction of the program, more than 10% of the employees registered into the program and this was a clear indication on how desperately people were waiting for a loan repayment assistance program.
The organization now has 25% of the people enrolled in the program. Moreover, almost 10 employees newly join the company every month, which was newly impacted by the Loan Repayment Assistance Program.
Thus the tip that Rise Interactive has for the other employees is that the organization should introduce the program at a slow pace and later expand it. This comes into picture particularly with the amount that you offer. A lower dollar amount helps you to have a greater impact on your budget. This is advantageous especially for low-income companies who want to pool a large number of fresh talent.