Employee Benefits

Why Offering a Student Loan Debt Payment Benefit Can Engage Millennials

Four smiling friends having coffee at coffee shop.

Attracting and keeping talented millennial employees is a challenge for employers in every industry. Research shows that millennials aren’t afraid to switch jobs. Nearly 75% of these workers, born between 1981 and 1996, believe that constantly changing jobs is necessary to advance their careers. About 40% say they’ve held four or more jobs. This turnover rate costs United States employers over $30.5 billion each year. So the question is: How can employers engage them so they’ll want to stay? Answer: Offer them a student loan debt payment benefit.

Did you know that the majority of millennials have student loan debt payments? One of their biggest worries is paying them off. That’s why they appreciate employers who offer a student loan debt repayment benefit. With fewer financial worries, this benefit can help keep employees be more engaged at work. And stay longer, because they are partnering with their employers to reduce their debt.

Losing talented employees is a top issue in employers’ minds. Here’s why student loan debt repayment assistance is an essential benefit.

Connects employees to their work

Research indicates that millennials often switch jobs because their employer isn’t coaching, training or educating them. Millennials also want to work for employers that offer benefits packages they can customize to fit their needs. This includes a student loan debt payment benefit. Research shows that 52% of prospective employees were attracted to a job if they received student loan repayment assistance. Employees who receive this benefit are more likely to stay for several years with their employer.

Read this blog to find out why a student loan debt repayment benefit also can attract more talented, diverse employees.

Eases financial burdens

According to The Institute for College Access and Success, 71% of students graduating from four-year colleges have student loan debt. Over 44 million American adults owe about $1.6 trillion total in student loans. Employees with student loan debt report spending time each day at work thinking about their financial burdens. Even worse, most employees with student loans will spend 10 to 30 years paying off this debt. Having access to a student loan debt payment benefit means employees can complete payments sooner. And in the process, they’ll pay less interest on the loans. Here’s where employers can help.

One easy way is offering a student loan payment benefit such as 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. Employees can apply unused matching dollars to help repay their student loan debt. Or, they can split the matching funds to make a payment to their student loan, and save the other part for retirement.

Each year, employees leave about $24 million in 401(k) matching funds on the table. Employee Choice is a simple way employers can use existing funds to provide student loan debt payment relief for employees.

Supports different needs

Millennials have different benefit interests and life goals. Because of their student loan debts, millennials are delaying major life decisions. Some are putting off starting a business, getting additional training or earning a post-graduate degree. Others are delaying purchases of a car or home. And many are choosing not to get married or have children. A student loan debt payment benefit can help employees pursue their personal and professional goals.

Sources:
Investment News

SHRM
Bloomberg

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