Why refinancing is not a benefit on its own

If your company is considering student loan refinancing, you should take a hard look at how a comprehensive Student Loan Assistance program differs from student loan refinancing on its own.


The primary reason that companies should not offer student loan refinancing on its own is that it may ultimately hurt the employee:

  • Federal loans have valuable protections (e.g., income based repayment, deferment, forbearance) that will likely be lost if the employee refinances to a private loan.
  • Employers should help employees make informed decisions.
  • Employers that promote a single lender discourage employees from seeking competitive rates/terms in the market, and may ally themselves with a lender that has a poor reputation and/or ethics. Employers should provide choice.


The second reason that companies should not offer student loan refinancing on its own is that they just don’t have much to gain from doing so:

  • No one will join the company, or choose to stay, because they can refinance their loans,
  • According to industry sources, only one to three percent of employees typically participate in stand-alone refinancing programs,
  • The employees that refinance do it once, and likely forget that the refinancing advertisement was delivered by their employer.


Companies are already competing for talent based on whether or not they offer Student Loan Repayment, so if you normally offer good (or great) benefits and decide to just offer stand-alone refinancing, be prepared for underwhelmed and potentially upset employees.


Peanut Butter helps employers attract, retain, and engage talent by administering comprehensive Student Loan Assistance programs configured to accomplish each employer’s unique talent and business goals.


Our programs have two components:

  • The Student Loan Repayment plan — we make it easy to contribute to employee student loans
  • Student Loan Resources — we equip employees with the tools to manage their student debt


Learn more here, or check out the video.



Student Loan Repayment is rapidly becoming the most sought-after benefit among college-educated talent. Through a Student Loan Repayment plan, employers contribute modest amounts each month to help pay down employee student loans (typically $50 per participant per month, see best practices from SHRM). And when companies help with student debt, employees respond in kind, as they are:

  • 13 percent more likely to accept a job offer that includes Student Loan Repayment
  • Willing to stay in a job 36 percent longer when Student Loan Repayment is included


The Millennial Benefit Preferences study highlights these and other advantages of offering Student Loan Repayment, including the opportunity to engage often underrepresented groups in order to accelerate the positive impacts of gender and cultural diversity.


While more than 25 percent of the U.S. workforce currently holds student debt, nearly 75 percent of the class of 2017 entered the workforce with student loans. When employees are given the opportunity to receive an extra $50 per month toward their student debt, 100 percent of student debt holders are likely to accept.


For employers, enrollment in a Student Loan Repayment plan equals engagement and engagement leads to greater productivity, longer tenure, and lower costs of turnover. With 401(k) participation rates declining, and people in their 20’s staying on their parent’s health plans, employers are thirsty for engagement.



Of those employees participating in the Student Loan Repayment plan, a portion need help managing their loans. One study found that 50% of student loan borrowers don’t even know who their loan servicer is.


Student Loan Resources provides insights on how to manage U.S. Federal and Private Student Loans as well as Canadian National, Provincial or Private Student Loans. It is software complete with articles and videos designed to help borrowers understand how their loans work, where to turn for help (including their loan servicer) and whether they might want to consider adjusting the structure of their loans…or if they might be a good candidate for refinancing.


Transparency is key as many borrowers will be better-off maintaining their Federal loans instead of refinancing to a private loan. About 25 percent of borrowers should consider refinancing, so we make the process easy. In under two minutes, employees can get prequalified by multiple lenders without having their credit score run. That means the company’s high income earners will have options, and so will employees with entry level income and no credit history.


Last, five percent of employed student loan borrowers just need to phone a friend. So, through Student Loan Resources, they receive access to both free and paid debt counseling options.



On behalf of our employer clients, our comprehensive approach to Student Loan Assistance focuses on creating engagement with their workforce. For example, a technology company with a young workforce can engage:

  • 40 percent of employees who enroll in Student Loan Repayment, plus
  • 20 percent of employees who also access insights and advice through Student Loan Resources, plus
  • 10 percent of employees who also consider refinancing through Student Loan Resources, plus
  • Two percent of employees who also pursue debt counseling through Student Loan Resources


Peanut Butter is a benefit administration company, not a consumer lender. We focus 100 percent of our time and effort helping employers attract, retain and engage talent.


Our comprehensive Student Loan Assistance programs help employers build affinity with their teams by offering Student Loan Repayment and help employers increase engagement with Student Loan Resources.


Peanut Butter delivers a consistent and positive reminder of the good your company is doing for each program participant through a monthly statement email that effectively says, “your company just contributed $50 toward your student loans — that single contribution helped accelerate your payoff date by six days.” Inside that email, presented in a contextually relevant way, employees receive additional advice on how to better manage their student debt with all the Resources they need, organized inside their Peanut Butter account.


Unlike stand-alone student loan refinancing programs, Student Loan Resources:

  • Provides guidance on how to manage federal and private loans,
  • Helps employees make informed decisions on whether or not to pursue student loan refinancing,
  • Makes multiple lenders compete so the employees that do pursue refinancing receive fair rates and terms,
  • Presents refinancing options within the context of the employee’s overall student loan repayment journey, and
  • Consistently promotes the employer as a champion in helping the employee tackle student debt.


Are you interested in making your company a workplace of choice by offering a market-leading benefit that will engage your workforce, promote diversity, productivity and employee tenure while helping your hiring managers recruit new talent faster?

If so, our Client Solutions team would love to help design a Student Loan Assistance program so that we can achieve your talent and business goals together.