Employees need MORE than student loan repayment assistance benefits

Student loan repayment assistance has become the hottest new workplace benefit, and for a good reason. Students graduate from college with thousands of dollars in student loan debt. As a forward-thinking employer, your first reaction is probably to jump on the student loan assistance bandwagon to help fuel your recruitment pipeline and retain talent. But is that really the right move?

First, let’s define what “student loan repayment assistance” means. For the purposes of this article, “student loan repayment assistance” means an employer helps its employees pay back their student loan debt.

It’s never a bad idea to offer employees help where they need it most, especially when statistics show that many employees would prefer student loan assistance over a 401(k) contribution or health care benefits.

But before you decide to offer student loan assistance, consider this: Employees who might be experts in everything from business and marketing to data analytics are often overwhelmed and confused by the student loan repayment process. That’s why it’s important to go beyond monetary contributions and offer student loan education benefits as well. Let’s take a closer look.

Employees need student loan education…

Too many employees are ill-equipped when it comes to managing the numerous and unfamiliar student loan repayment strategies. We surveyed 1,000 student loan borrowers and found that 73 percent of respondents do not know how to find out if they qualify to pay less on their student loan payments. Additionally, close to 50 percent of respondents do not know who their servicer is and 31 percent do not know how to even contact their servicer. (A student loan servicer is the company that collects payments and can helps determine a repayment plan…pretty important!)

Even for employees who know the basics of student loan management, balancing student loan payments with other personal goals, such as buying a house or getting married, can be challenging. The inability to pursue these goals is frustrating; however, there could be repayment options that would allow employees to balance their student loan payments with these other goals. The problem is, most employees don’t know about these options.

 

That’s why companies looking to add student loan repayment assistance should put some thought into supplemental student loan education. Without education as a first step, employees could become overly confused about their options or could opt out of participating.

And employers can’t walk them through it.

More than 70 percent of student loan borrowers felt that paying back their loans is more difficult than it needs to be, and close to half of respondents with student loans aren’t receiving any form of repayment counseling.

Most human resources departments don’t have the time or the knowledge to provide employees with student loan repayment counseling. That’s okay – you shouldn’t have to. You wouldn’t expect your human resources department to advise employees on their 401(k) plans, right? Just as a 401(k) advisor is brought in to discuss retirement strategies with your employees, a student loan repayment assistance provider should have advisors as well.

Employees understand and pay back their student loans

An interactive web-based portal, allows users to manage their student loans, find the best-fitting repayment plan, speak with expert student loan counselors, and even set up alerts that will notify them when a payment is due. This educational tool comes with our student loan assistance benefit to maximize your monetary contribution.

Go BEYOND Education loans repayment assistance and provide your employees with a benefit that includes both the education and the monetary assistance they need to effectively pay back their student loans. Want to talk with someone about starting your student loan benefits program? Contact iontuition today.

Source: https://blog.iontuition.com/employees-need-more-than-student-loan-repayment-benefits/