One big advantage of Student Loan Assistance is its flexibility versus other benefits, providing employers the ability to tailor their Student Loan Assistance programs to meet their company’s unique talent goals.
While we can design plan in countless ways, the three main factors for consideration are:
- Eligible population
- Contribution amount
- Special qualification criteria
We see three plan designs emerging as the most popular:
#3 – A subset of employees are eligible
We’ll start with the third most popular program, and this is typically for companies eager to begin engaging a portion of their talent and not willing to wait until the next benefit plan year to make an impact. This is commonly a phased roll-out where employers will focus immediately on the population of highest need. In some cases, that’s a call center where turnover is high and Student Loan Assistance can help curb the challenge. In other cases, it’s been the leadership development program where Student Loan Assistance can help speed up recruitment.
In these cases, contribution amounts vary. We would recommend that a hospital system seeking to attract physicians contribute more than a digital agency seeking to retain designers. In almost all cases, there are no special qualification criteria as employers choose to focus on simplicity particularly in a fazed roll-out.
#2 – All employees are eligible to receive $100 / month to their student loans
The average student debt holder in America has just north of $31,000 outstanding and an extra $100 per month will help her/him get out of debt in seven years instead of 10, saving more than $11,000 in principal and interest over the life of their loan. The monthly assistance from their employer significantly brightens the light at the end of a long debt repayment tunnel, so many companies will choose to offer a $100 monthly contribution.
At most companies, all full-time employees are eligible for benefits, so it’s common to offer Student Loan Assistance that way as well. Again, employers choose to minimize special qualification criteria such as a holding period or degree requirement, favoring plans that are simply communicated and simply understood.
#1 – All employees are eligible to receive $50 / month to their student loans
Many employers target $100 monthly contributions but prefer to start at $50. Starting smaller lowers the cost and minimizes enrollment risk, giving employers the opportunity to see how it works. It also preserves the opportunity to generate additional enthusiasm in subsequent years with increased contribution rates.
Our client Rise Interactive adopted this plan design and was featured in a recent Employee Benefit News article heralding its effectiveness.
Things to keep in mind:
The competition is fierce for college-educated talent, but Student Loan Assistance can help your company achieve a competitive edge in attracting and retaining great folks. Plan design is critically important to the success of your program. Peanut Butter supports employers by providing benchmarking and analysis for goal-driven plan design. Your Peanut Butter Client Solutions Manager can help design a plan that’s right for your company, providing answers to the following questions:
- How many of our employees hold student debt?
- How should our Student Loan Assistance plan be designed and communicated?
- How many employees will participate and what’s the return on our company’s investment?