Words like student loan “help” and “match” have been known to strike fear into the hearts of CFOs. When protecting the balance sheet is your job, the big question attached to most ideas is, “How much will it cost?”
To help marry HR’s hopes of helping with student loans and the company balance sheet, here are two cost-effective ways to offer student loan repayment benefits without breaking the budget.
CONSIDER ONE-TIME OR NON-RECURRING PAYMENTS
Our user data shows that employees who use Student Loan Genius have an average student loan payment of $638 due each month before optimizing their student loan. For the average college graduate, who makes $50,651 per year, one payment cuts their monthly expenses by about 20 percent. That’s enough help to pay one and half times the average American car note or more than 100 times the amount required to bring a federal loan back into good standing (note, it only takes $5).
For a 1,000 person company with 20 percent of employees who have student loans, a one time student loan payment as a performance reward or financial wellness bonus will cost a little more than $140,000. Offering a one-time payment (instead of monthly help) cuts the cost of a student loan benefit program by about 90 percent.
OFFER REPAYMENT BENEFITS TO GROUPS WITH HIGH NEED AND OR ROI
For companies whose bottom lines rely on heavily specialized skill sets, a student loan benefit program could be another great way to retain those employees who are the most expensive to replace. Making your student loan repayment benefit available to a limited set of team members or departments (e.g. engineers, nurses, doctors) could help your company focus the benefit to control the budget and maximize the return and impact.
With 89 percent of job seekers with debt declaring companies should offer student loan repayment as part of the benefits package, it’s only a matter of time before it’s the standard in benefits packages. Today, these two strategies can help innovative companies begin expanding their benefit offerings in a budget friendly way and gathering data to help forecast benefits budgets for the future.