As employers are looking for new ways to attract and retain top talent, they’re trying different recruiting and retention strategies to see what appeals to potential workers. 

Education assistance programs— which most notably often cover some or all of an employee’s qualifying tuition, training, or upskilling costs— are one of the most effective strategies businesses can leverage. And while employee education assistance most often focuses on facilitating new skill development, the most competitive companies also offer student loan assistance programs to better support their staff.  

What Are Student Loan Assistance Programs? 

Only 8% of employers offer student loan repayment programs while the demand for student loan support has tripled since 2019, making it a competitive employee benefit. These assistance programs can offer a variety of different employer-sponsored benefits to help employees manage their student loan burden. 

A lot of changes to student loans recently went into effect, so here’s a quick rundown of what offerings may be included in your program:

• Direct payment programs: Make direct payments to the loan servicer to help employees pay down their debt faster. This is the most popular option for companies, used by 95% of EdAssist clients.
• Reimbursement programs: Reimburse employees for portions of student loan payments to to help with cash flow.
• Retirement match programs: Match qualifying loan repayments as a retirement contribution, making it a powerful way to support both short-term debt and long-term savings for employees.
• Loan Coaching and Guidance: Expert coaching helps employees understand their loans, navigate repayment plans, identify forgiveness opportunities, and create a personalized repayment strategy.

How Student Loans Decrease Employees’ Quality of Life

Bright Horizons 2024 Education Index found that 80% of workers with loans said that student loans had been a huge burden on their personal lives in multiple ways:

• 55% of workers said it negatively impacted their financial situation.
• 43% said it negatively impacted their mental health.
• 29% said it impacted their sleep. 

Whether you’re helping your workers pay down their debt faster or pay for retirement contributions they may have otherwise struggled to afford, these are significant benefits that can change your employees’ quality of life.

Reduces Financial Strain on Employees

The average federal student loan debt is nearly $38,000 per borrower, with an average estimated monthly payment of around $500. It’s no surprise, therefore, that many American workers are crushed under the weight of student loan debt, to the point where it’s impacting their lives on a daily basis. 

Americans are already struggling with the recent rising cost of living. Even with inflation slowing down, a recent study found that 36.4% of households noted they had a somewhat or difficult time paying their usual household expenses. These financial struggles are impacting many workers’ abilities to save for retirement, with a recent study finding that only 36% of workers currently feel like they are on track for their retirement plan. Even employees who have the option to take advantage of employer match contributions can’t leverage those benefits if they can’t afford to contribute to their retirement on their own.

Student loans have become even more of a pressing concern for many Americans. The Trump administration has begun garnishing wages of borrowers who were in default on their student loans. The Department of Education reported in May that 5.3 million defaulted borrowers would get a notice that their wages could be garnished, creating an enormous financial stress for many who were already struggling to keep up. 

All student loan assistance programs can reduce the financial strain caused by student loans, whether it’s enabling employees to actually save for retirement, increasing their overall cash flow, or paying off their loans faster. This can reduce their stress, and potentially result in happier, more productive workers. 

Learn how Student Loan Benefits are the In-Demand Key to Recruiting, Retention, and Financial Wellness in this on-demand webinar.

Enables Employees to Pursue Additional Education 

The workforce overall is currently facing labor shortages and gaps in critical skills across diverse industries. Employee upskilling is the most efficient solution, allowing organizations to foster the skill development they need and retain their best talent. 

However, when left to pursue upskilling and continued education on their own, many employees find themselves unable to do so. 

Our Education Index found that 74% of workers are interested in developing new skills, but 53% said that knowing they would incur student loan debt has prevented them from pursuing additional education. Another 40% said that they can’t advance their career because they can’t afford to take on additional student loan debt. 

With the current financial burden caused by existing student loans, footing the bill for continued education isn’t an option for many workers. 

On-demand education assistance programs and student loan repayments, however, can make a difference; 83% of workers would be motivated to pursue education if provided with the financial assistance, time, and access to information about opportunities.

Student loan assistance can be an important part of facilitating ongoing education, even if your organization is already covering tuition or training costs. A 2024 study found that more Americans were taking on side gigs to either have more spending money (25.47%) or to cover bills (14.4%). 

As your workers may need to take on second jobs or side jobs to cover their existing bills, potentially including their student loans, it leaves them less time to pursue continued education— even if it’s free. Student loan assistance may reduce your team’s need to do additional work elsewhere, making it easier for them to actually pursue the education they want to obtain. 

Increases Employee Recruitment & Retention 

Employers want to find ways to attract skilled, motivated talent, and they want to keep the talent they already have— especially in the face of upcoming labor shortages. One study found that 65% of organizations said these shortages were a top concern in 2023, with 26% saying that a lack of career advancement was preventing them from acquiring talent. 

Our 2024 Education Index found that 84% of employees would be more loyal to companies that invest in their education, and 82% would choose a job at a company that offered education assistance over one that didn’t. Student loan assistance is a crucial part of that investment, whether you’re helping workers pay off existing loan debt or debt they may incur for additional education. 

Offering student loan assistance programs is an effective way to offer upskilling and subsequent career advancement opportunities while reducing their financial stress. These benefits combined can help workers consider you an employer of choice. 

Interested in offering student loan reimbursement or repayment benefits to your employees? Check out this on-demand webinar to learn more about EdAssist’s student loan support programs.