How To Get Your Employer To Help You Pay Off Your Student Loans | Smart change: personal finance
Recent headlines stated a student loan reimbursement assistance one of the hottest new trends in the workplace.
But in the more than five years since big companies like Aetna and Fidelity began helping their employees pay off student debt, the benefit has still only been offered in about 8% of companies, according to a Willis Towers Watson survey.
What if you worked in the remaining 92%? Like any part of your pay (or your life), it can help to just ask for what you want. The result could have a bigger impact than you think.
“Employers tell us that someone has come to talk to them,” explains Romy Parzick, CEO of Vault, which manages educational assistance services for 1,500 clients. “And this sparked the benefit for [the whole company]. “
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Gather your supporting documents
If your company employs a large portion of workers with four-year degrees, chances are good that many of your colleagues are in debt. Seven in ten undergraduates now borrow to pay for their degree, and student debt spans generations: 8.7 million student loan borrowers are over 50 years old.
You can take your research a step further by researching industry-specific borrowing statistics, or even asking your employer to consider surveying employees to measure their level of debt.
If your business has highlighted its diversity, equity and inclusion goals, says Parzick, be sure to highlight data showing how student debt disproportionately affects black people and Latino borrowers, and how women own 60% of all student debt.
At PwC, one of the first large companies to announce its student loan repayment program in 2015, CEOs to say that 62% of eligible black employees and 52% of eligible Latino employees participate in the benefit, higher percentages than eligible white or Asian employees. The consultancy, which pays up to $ 1,200 a year in student loans to eligible employees, enrolled more than 16,000 workers in the Advantage in the first five years of its inception.
Sell it as a net benefit – not just a benefit to employees
Once you’ve shown that student loan assistance will help employees, it’s time to make the case that it’s a good business decision, too.
Benefits are widely recognized as a key part of recruiting and retaining employees, so focus on those, says Virginia Adams, senior human resources knowledge advisor at the Society for Human Resources Management.
About a quarter of the employees surveyed in a recent improvement survey said they would quit their current job for one that offered student loan assistance. The share drops to about half when considering only Generation Z workers.
In the case of Nebraska Medicine, a chain of hospitals in the Omaha region, offering student loan assistance to bedside nurses resulted in a 55% increase in retention and allowed the company to save $ 5 million in turnover costs, according to Prudential, which partnered with the hospital to design the service.
Even if you can’t find specific numbers, you CAN collect information on employers hiring in your area or industry that already offer this benefit. (You’ll likely build a healthy list just by looking at your competition’s hiring pages, says Adams.)
Finally, make sure your employer (and your human resources department) is aware of a useful tax policy: as of 2020, $ 5,250 of student loan repayment assistance is considered tax-free for both the employer and the employee. The favorable tax status runs until 2025.
Refinancing your student loan could allow you to pay off your student loan debt sooner.
Lower your interest rate or lower your monthly payment.
Go behind your boss’s back
OK, we’re ironic there. But if you don’t feel comfortable approaching someone with the power to present this benefit, try emailing one of the benefit providers that operate in this space, such as Tuition.io, Gradifi, Goodly and Bright Horizons’ EdAssist.
Even though Vault does business-to-business sales, Parzick says it’s not uncommon for people to email their company and say, “How do I get this benefit in my workplace? Can you help me ?’
After receiving one of these emails, Vault sellers contact the company in question, notifying the company that an (unnamed) employee has contacted. His team found that this type of cold communication is much more likely to lead to a recall than without an employee’s request.
“It’s an interesting indicator of how much importance employers place on what their employees are looking for,” she says.
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