A huge proportion of job seekers have student loan debt. With the cost of college having skyrocketed over the past few decades, new professionals must take on massive debts to earn their education. Fortunately, businesses are in a unique position to offer employer-funded repayment plans, both boosting their recruitment efforts while helping young employees out of student debt.
U.S. Americans have amassed $1.4 trillion in student loan debt as of November 2018, according to PR Newswire. Despite this, only an estimated 4 or 5 percent of employers offer student loan repayment plans. While salary is still more important than benefits to job seekers, benefits such as student loan assistance still play an important role in attracting talent. Approximately 10 percent of job seekers say benefits are their top consideration in their job search, according to a 2018 survey by Clutch.
Employers willing to bridge this gap and adopt student loan plans are sure to find themselves with a competitive advantage. This is particularly true when it comes to hiring millennial workers and recent graduates, who tend to carry heavier loads of student loan debt. Women and minorities also tend to have more education-based debt than other groups. Therefore, offering this benefit may also boost organizational diversity.
Student loan payments often keep young professionals from contributing to saving plans such as their 401(k), but this benefit helps employers boost their employees' financial health in a new way. To implement this benefit, companies generally allocate a specific amount each month that goes toward the worker's student loan debt, such as $50 or $100. Companies concerned about other employees feeling cheated can offer the same amount in stipends for ongoing education, ensuring all workers are getting equal benefits.
While student loan assistance works as a recruitment tactic to draw interest, it also helps boost employee retention. Workers in this situation tend to be more loyal and grateful to their employers. After all, helping with student loan payments takes a heavy weight off of employees' shoulders. This can also help cut down stress and financial anxiety so employees can better focus on their work.
If companies want to keep young talent from looking elsewhere, offering this benefit is a smart move. Around 32 percent of workers are actively searching for positions offering either better pay or better benefits. Student loan assistance keeps your company attractive to workers who may be on the fence.
As the costs of education continue to rise, student loan assistance is sure to become the most sought-after benefit of the future. For now, those who implement it are one step ahead of the rest. Would you be more likely to work for a company that helps pay off your student debt? Share your opinion in the comments below.
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