A chance for employers
The fact that so many job openings require some college or a bachelor’s degree is an opportunity for employers. Many job applicants will have student loans they need to pay off. This means an employer educational assistance program that offers student loan repayment benefits will make an employer stand out to applicants. Having a specific benefit that meets the needs of an applicant can be an attractive draw.
Since advanced degrees are in such high demand, an employer that positions itself as a partner in their employee’s educational advancement can distinguish themselves from the rest of the pack. Applicants that are hoping to continue their education or complete a degree program can be attracted to an employee tuition assistance program.
Lastly, a comprehensive benefits package that includes health insurance, employer child care benefits, paid vacation, and parental leave have been found to be important for job seekers.
Types of assistance
An employer educational assistance program may be implemented a number of ways. Educational assistance may take the form of an employer helping to pay off student loans. The employer will typically pay a set amount each month, either towards the principal of the loans or the interest on the loans.
An employer may also help an employee pay for tuition for a degree or certification pursued while employed. Instead of covering pre-existing costs, an employer partners with an employee to either help or entirely pay for tuition accrued while the employee is employed. An employee tuition assistance program may come with the stipulation that the degree or certification be relevant to the type of work the employee is expected to perform, or be useful to the organization offering the assistance.
When an employer offers educational assistance, they signal that they are willing to partner with their employees. Instead of looking outside the organization for new hires with the perfect set of qualifications, an employer educational assistance program taps an internal talent pool. This can boost morale by communicating that the employer considers their people a resource that can’t be readily replaced. It is also of practical benefit, as an employee that expands their training keeps their institutional knowledge within the organization.
For fields where there is high turnover, such as healthcare, it can often be less expensive for the employer to offer tuition assistance than it is to hire someone with the desired credentials. It can cost healthcare organizations over $50,000 to replace a registered nurse, so a nurse tuition reimbursement program that is able to increase retention can be a wise outlay.
An employer educational assistance program that is able to increase retention and improve the credentials of an organization’s workforce is a win for both the company and employees.
In addition, employer educational assistance can prove to be tax-efficient for both the employer and employee. Employees are not taxed on tuition assistance or employer student loan repayments below around $5,000. Employers are legally able to treat employee educational assistance more tax efficiently than standard compensation.