4 Reasons Employee Loan Repayment Should Be on Your Radar
We've already talked about why these programs are on our radar. Here are four reasons they should be on yours:
Be Ready for New Rules
New proposed legislation creates substantial opportunity for employer education programs. As Mark Ward pointed out recently, these laws could not only double (from $5000 to $10,000) the amount of untaxable education assistance employers can contribute, it will also newly designate loan repayment as qualified assistance. If one of these laws passes, employers could provide tax-free tuition and student loan payments for their employees - and student loan repayment programs will spread at an even faster clip.
Get an Edge in the Talent Wars
Stories like that in the Boston Globe have been cropping up week after week -- even before any new tax advantages. Employers are always looking to get positive publicity, particularly in a tight talent market. As with anything, those first out of the gate with a student loan assistance program are likely to get employees' attention and realize the most benefit.
Get a Jump on Planning
It's not easy to launch a new program. Getting buy-in and then creating policies and programs that meet strategic talent goals take time and energy. In order to benefit from the above talent-war edge, it's important to start internal conversations now about what this benefit could look like, who will run it, and exactly how it will work.
Address Growing Employee Debt
Current collective educational debt is at $1.3 trillion and climbing. Nearly three quarters of recent graduates are carrying an average debt of $28.4K, and almost a third are 90-plus days delinquent. By offering to help with payments, the private sector can not only help employees with the burden of student loans, but also provide themselves with a powerful new tool for recruitment and retention.What's a fifth reason you want to keep loan repayment on your radar? Keeping up with your peers. Loan repayment programs made SHRM's annual benefits survey list for the first time this year. In fact, 3% of employers already have a program in place. That number could quickly climb - and the minute your competitor launches one, your job candidates will raise their expectations.
"We're seeing this concept take-off with many of our clients even without legislation providing a tax incentive," says Mark. "Knowing what may come next on Capitol Hill makes the idea of student loan repayment even more compelling."
And that makes it a trend every employer should be eyeing for their 2016 toolbox.