Posted December 2, 2019
Student loan repayment impacts American adults of all ages. Collectively, they owe about $1.5 trillion in student loans. And it can take a decade or two to pay off. Financial experts recommend paying off college loans as quickly as possible. However, many people struggle to manage their finances. And because their education makes them more valuable at work, employees want employers to help them repay their student loans. Here are three ways employers can help employees repay student loans, and pursue additional education.
Educate employees on managing finances
Many employees are overwhelmed by the burden of their finances and often feel like giving up. They don’t see a solution to their problems. However, employers can offer financial well-being programs including educational resources and counseling. It’s a good way to help workers set financial priorities, establish budgets and save for the future.
Help employees repay student loans
As part of employer financial well-being programs, businesses can help repay student loans. Nearly 53% of millennials say student loans significantly impact their ability to save for the future. In addition, employees age 60 and older are burdened with student loan payments. Many Americans continue to pay on student loans even after they retire. About 31% of baby boomers ages 54-72 say they have stopped saving for retirement to pay off their student loan debts.
One simple and easy way employers can help employees repay student loans is by offering Employee Choice. It is a student loan repayment benefit exclusively offered by BenefitEd and Ameritas. It’s designed to use funds employers already have set aside for 401(k) matching contributions.
The Employee Choice plan allows employers to stretch their benefits budgets by leveraging what they’ve already set aside for 401(k) matching contributions. Employees can apply unused matching dollars to help repay their student loans. Or, they can split the matching funds, and make a payment to their student loan and save the other part for retirement savings.
Help employees pursue additional education
Employees who already are repaying student loans are hesitant to spend more money on educational programs. Although they are interested in continuing education and enhancing their skills, they may put off these expenses.But there’s good news. Employers can help employees by offering a college 529 savings plan. It’s generally used to save for a child’s or grandkid’s college expenses, but it can be used by the employee, too. These plans allow employees to save for classes at a qualified college or trade school. In addition to tuition, the funds can be used for books or a computer, as long as these items are used for education purposes. Read this blog to learn more about how repayment of student loans impacts employees, and how employers can help.
Did you know? Research shows that chronic stress from finances affects about 26% of American adults most or all the time. Discover how employers can provide benefits and programs that improve their employees’ financial health and wellness. It truly is vital for success, because employees who are less stressed are more alert and productive at work. And that’s good for business.