The fact that the student debt crisis continues to explode is nothing new. Borrowing has already topped the $1.4 trillion threshold nationwide, and the average American household owes $10,397 in outstanding loans.
Recent college grads have it even worse. The typical degree holder who graduated last year came away $37,172 in the hole, and younger borrowers aged 20 to 30 are now on the hook for an average monthly loan payment of $351. Ouch.
But what if there were an easier way to repay your loans by, well, not repaying them yourself but rather having your employer pick up the tab? It's an option an elite few get to enjoy at present, but one that may be gaining traction as companies realize just how desperate workers are to have the burden of student debt removed.
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, 45 percent of employees claim they'd choose student loan repayment over any other workplace benefit, including retirement plan contributions. And 90 percent 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.
And 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 percent 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.