NEW - Nivati adds financial wellness tool! Learn More

March 29, 2016 Amelia Wilcox

Employee Benefits Spotlight: Paying off Workers’ Student Loans

There’s no question that student loan debt has a huge financial impact on our country. . The average student loan debt for the graduating class of 2015 over $35,000, which is more than double what it was two decades earlier, even after adjusting for inflation. So it stands that these educated, well-trained college graduates will be looking for ways to quickly pay down that debt.

Some companies are finding ways to help their employees pay off their student loan debt. The Society for Human Resource Management reports that only 3% of companies are offering this perk, but given the state of things, that number is likely to rise.

employee benefit ideas


 Paying Off Student Loans as an Employee Benefit


In the past, there were a select few careers a recent college grad could choose from that promised to pay back some of their student loans.

For example, new physicians who spend some time working in rural communities can get up to $50,000 in student loan forgiveness. Other options include some teaching positions, non-profit work, or various works for the public good.

But these aren’t careers that everyone is interested in or suited for. So what about the rest of us?

 

How Companies Help Employees with Student Loan Debt

In the near future, more employers could be offering this benefit across all business sectors. Some companies will get some government kickbacks and tax breaks, others just want to offer more unique benefits to make hiring practices more competitive. Whatever the reason, this is good news for workers carrying student loan debts.

Related: How Do Employee Benefits Close the Deal for Top Talent Recruits?

 

student loan assistance as an employee benefit

 

Why Employers Are Offering This Benefit

As mentioned above, student loan debts are burdensome things for new grads — more so than any generation before. Since financial stress is generally a top concern for most workers anyway, the added concern of so much debt when beginning a career can be crippling.

When employers are able to find ways to alleviate stress in any form, their employees become a little less stressed out and a little more focused at work.

 

Smart companies build assistance programs that address all kinds of employee stressors — whether they’re physical, mental, or financial. <– Click to Tweet

 

That’s because employees with low stress levels can focus more on work, and are more engaged with their companies.

Related: Employee Retention: It’s Not as Difficult as You Think 

 

How it Works

Since this benefit idea is in the early stages, there is not yet an industry standard for how to make it happen.

If passed, The Student Loan Repayment Assistance Act could provide tax-free payment options for employers who want to help their workers pay off their loans.

The way things are now, these types of payments would have to be considered a part of an employee’s salary and would therefore be taxed.

Related: 9 Insider Tips on Corporate Culture

As an alternative to direct payments, some companies, like Prudential Retirement, will provide a pretax 401(k) contribution as a reward for employees who regularly make their student loan payments.

 

Amelia Wilcox

Amelia Wilcox is the Founder and CEO of Nivati, a leader in corporate massage and employee mental health support since 2010. Her high-growth B2B company provides employee stress management tools that arm businesses with actionable data and positive employee experiences to improve wellbeing, boost morale, and increase engagement.

Amelia has exponentially grown her company from a solo living-room service business to an international technology brand.

Awards
Recently listed as a Forty Under 40, Fast 50, Inc 5000 Twice awarded National Woman-Owned Small Business of the Year

Licenses, Certifications & Memberships
Licensed Massage Therapist since 2002
Member of American Massage Therapy Association
Served on Utah Worksite Wellness Council from 2012-2015

Education
Attended Utah College of Massage Therapy
Educated in Nutrition and Exercise Physiology at the University of Utah

Publications
Massage Magazine (AMTA's publication)  

MENTAL HEALTH FOR THE WHOLE EMPLOYEE