It’s no secret that student loan debt is one of the top financial burdens that college graduates face. That’s part of the rationale behind the growing movement of employer-sponsored student loan benefits — a movement you should pay attention to whether you’re an employer or employee.
Will your employer pay off your student debt?
There are certain workplace benefits employees have come to expect over the years — things like subsidized health insurance, paid time off and 401(k) plans with matching dollars. But most workers don't expect their employers to go so far as to cover their student loans.
Still, it's an extremely welcome perk for those who had to borrow money to attend college, and it's one that more companies perhaps ought to consider. According to Gradifi,1 45% of employees claim they'd choose student loan repayment over any other workplace benefit, including retirement plan contributions. And 90% say that a student loan repayment benefit would positively impact their decision to accept a job offer, recommend an employer to an applicant or stay at a current job.
That's something employers should pay attention to, because while most companies do indeed offer perks like vacation days, health coverage and retirement dollars, very few are willing to help ease the burden of student loans. In fact, only about 4% of employers offer student loan repayment despite the fact that so many workers are seemingly desperate for it.
Of course, for some companies, it's a matter of budgetary restrictions. It's hard enough providing the core set of benefits workers come to expect without having to worry about helping employees pay off their college debt. Furthermore, since different workers carry varying levels of debt, it's a program that would need to be heavily researched to determine what level of repayment would actually make a dent in talent attraction and employee retention.
Still, it's a potentially worthwhile investment for companies to make, especially given the cost of replacing existing workers and onboarding new ones. Though job hopping is by no means limited to younger members of the workforce, it's estimated that the typical millennial employee will hold 12 to 15 different jobs by the age of 40, and that's a lot of talent to potentially replace. On the other hand, offering up student loan repayment on a silver platter is a good way to get some of those otherwise fickle younger workers to stay put — workers who are the most likely to still owe money.
If you owe money after college and are currently seeking work, it pays to look at companies that offer some sort of loan repayment program. And if you're already employed, it certainly wouldn't hurt to present the idea to your company and see if you get any buy-in. You may need to pledge something in return — say, a commitment to stay on the job a certain number of years after reaping that benefit — but if that's what it takes to break free from your student debt, it could be a sacrifice well worth making.