Helping Employees with Student-Loan Debt

Helping Employees with Student-Loan Debt


Did you know student-loan debt has skyrocketed
by 96 percent according to a Federal Reserve study? If you are one of the over 44 million individuals
with student loan debt, and were not a 2019 Morehouse College graduate lucky enough to
have your debt wiped clean by billionaire philanthropist Robert F. Smith, you probably
have a keen interest in this topic. Even employers are starting to look at their
role in helping employees pay down their student-loan debt. According to a Mercer survey conducted in
2017, approximately 5 percent of payroll may be lost to unproductive time due to financial
stress, which equates to roughly $250 billion per year. And this doesn’t only impact younger employees. Many mature employees are incurring debt by
helping their children pay for college or paying to enhance their own skills or to train
for a new job. Is this an opportunity for employers to stand
out in the competition for talent? Absolutely! According to the 2019 SHRM Employee Benefit
Survey, only 8 percent of companies offer some form of student-loan debt assistance. In another SHRM study, more than half of workers
surveyed stated that student-loan repayment assistance would be a factor in evaluating
new job opportunities. So what are the options? Employers can look to their retirement plans. Some employers are requesting private letter
rulings for different plan designs to help with employee student loan debt. Employers should also keep an eye on proposed
legislation in this area. Employers might want to look at expanding
their wellness plans to include financial wellness. Another interesting option allows employees
to exchange accrued, unused paid time off (PTO) for payment against their student loan
debt. Finally employers can look at helping with
refinancing options for employees with student-loan debt. As this debt crisis continues, we are sure
to see more creative benefit offerings emerge. Employers Council will continue to update
you on any movement in this area.

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