Student Loan Repayment Programs: The New Workplace Super Benefit
By Ahnaf Bashir, Vice President of Human Resources, Advance Financial Jul 11, 2019 | Benefits and Compensation, Recruiting
Although Millennials are most often cited for being slammed with crippling debt, actually, one in five adult Americans carry student loan debt, according to NBC News. This could be anyone, from your company’s newly graduated intern to your vice president.
Student loan debt doesn’t discriminate by age, race, sexual orientation, seniority, or intelligence. The obligation to pay it back is a financial and mental burden on anyone, regardless of their age or income. And the level of debt continues to rise. According to a 2019 study, the average student loan debt is up a staggering 302% in the past 14 years alone.
So, what are companies doing to provide support to the large number of employees who are buried under the weight of this obligation? A growing number of employers—Aetna, Fidelity Investments, Estée Lauder, Staples and, now, Advance Financial—are instituting brand new student loan repayment assistance programs.
A Society for Human Resource Management (SHRM) survey showed that in 2018, just 4% of employers offered this benefit. The number is growing sharply in 2019 with the primary goal of attracting and retaining top talent. Specific details of this benefit vary from company to company. Here is a look at what Advance Financial has put in place.
Structuring the Repayment Program
After months of market research, Advance Financial introduced a student loan repayment program in which the company will contribute a significant amount (up to $12,000 over the course of 6 years) toward repayment of each employee’s student loan(s). The goal of the revolutionary program is to help employees pay off loans more quickly, allowing them to focus on their careers, gain more fiscal freedom and, most importantly, regain their peace of mind.
Once an employee has completed one year with the company and is enrolled in the program, Advance Financial provides a sizable introductory contribution directly to the financial institution holding the employee’s student loan. Standardized monthly installments continue as long as the employee is making the minimum installments and keeping their account in good standing. The payments incrementally increase each year an employee is with Advance Financial. The employee is under no contractual obligation to pay back the money if they choose to leave the company at any time.
As of now, just six months since the launch of the program, 67 employees are already taking advantage of this benefit.
The Benefit that Existing and Potential Employees Crave
When talking dollars and cents, you might think that higher starting salaries would be just as important to potential employees as a student loan repayment program, but there’s something about helping pay an existing debt that really strikes a chord.
Since the beginning of 2019, Advance Financial has improved its retention rates. These results align with national trends. A recent study found that 78% of employees would accept a job offer with student loan repayment assistance, and 85% said they would commit to staying at that job for 3 years.
While we recognize that this benefit increases workforce retention, our focus continues to remain on how we can go above and beyond in serving our incredible team of employees. Building an on-site gym, providing 40 hours of paid time off to volunteer in the community and keeping an on-site nurse and masseuse are just some of the many ways we let our employees know that we prioritize their personal well-being, not just their work performance.
Making student loan repayment a reality in our company was never a question of “why?” but “how?” We wanted to deliver this new benefit in a manner that stood out! The relief and excitement we saw from our employees when we personally announced the news assured us that our goal to provide the best cutting-edge benefits to our employees truly changes their lives.
About Advance Financial
Founded in 1996, Advance Financial is a leading fintech company based in Nashville, Tennessee. With more than 100 stores in Tennessee and online services in 13 states, Advance Financial provides fast lending decisions on line of credit loans and other financial services, 24/7/365. Recent recognition includes 2018 Inc. 5000 fastest-growing private companies (7 straight years); A+ rating by the Better Business Bureau; Nashville’s 4th fastest growing company (2018, Nashville Business Journal); Forbes Best Employers for New Graduates (2018); and, Indeed Top-Ranked Workplace for Compensation/Benefits (2018). For more, visit https://www.af247.com.
Original source: HR Daily Advisor