This is the second post in the five-part series: “How to attract and retain the talent you want.” If you missed part one, click here.
Step two: Contribute what you’re comfortable with
Employers are competing for talent on whether they offer student loan repayment, not on how much they contribute. When you offer a student loan assistance benefit, it communicates to your candidate that you care about their well-being enough to help them get out of debt sooner.
A good guideline to contribute is $50 per month per employee. If that sounds costly, consider what you would be willing to pay to increase the number of qualified candidates submitting their resumes. Or, the reduction in employee turnover costs you would see if employees stayed for six to nine months longer. If it still doesn’t seem doable for your company, consider swapping student loan repayment for that free gym membership/free food perk you offer. The Millennial Benefit Preferences study shows student loan repayment is valued 7x more than other ancillary benefits.
The most rewarding part is the positive financial impact you’ll have on your employees’ debt. An employer-provided $50/month contribution can help the average borrower get out from under his/her student loans in eight years instead of 10, and save close to $7,000 in principal and interest (assumes $31,000 balance, 6% interest rate, 10-year repayment term). This won’t go unnoticed.
Wondering which plan design would work best for you? Check out our blog post on the three most popular student loan repayment plan designs.