By Casey Kirkeby, RISQ Consulting Strategy Consultant
When an employer hires their first employee, benefits are on their mind. There are so many employee benefits out there that it is quite overwhelming to talk about all of them in one blog. There is telecommuting (remote workers), Telemedicine, New Parent Leave, Lactation aid for new mothers, Loan repayment in exchange for employees not taking vested paid time off, and so much more. I want to talk about one in particular that has the added benefit of saving our younger generation helping post college students pay back the collapsing debt that ultimately holds them back.
College debt is a growing epidemic in our society and today it is actually hindering people from saving for retirement. According to a recent survey done by Society of Human Resource Management, more than $44.7 million borrowers owed more than $1.5 trillion in student loans. That exceeds the gross domestic product of all but a dozen countries around the globe and employers can help with a little education and providing a resource to help people pay the money back. I have student debt, my mom just paid off her debt about 10 years ago and she is 63 years old today. I know more than a handful of people who have more than $80,000.00 that they owe back to the government for schooling that they took over 8 years ago and will be paying on it for most of their life.
Now honestly this can be addressed at the most basic level by providing guidance and education when they first apply for financial assistance, but as an employer, you do not have control of this. You can provide direction by offering a tuition repayment benefit that not only helps employees pay student debt off sooner, but also helps manage their expense and forecast their financial needs.
Many companies choose to reimburse up to $5,250 per year, which is the ceiling that the federal government allows for tuition benefit expenditures to be exempt from withholding tax. Other employers are offering to make loan payments in exchange for employees not taking vested paid time off, such as vacation days. It can be as easy as facilitating payments through payroll deferral and offering to match up to 50% of their payment that will get them excited. You can also construct quick videos that contain onsite financial advice that provides an outline with a good approach for whittling down their repayment and financing.
Now these are just some examples of what the current workforce is doing to help keep our debt-challenged workers ahead of the game and over at RISQ we can help you design an Employee Benefits Program that works for you and more importantly, your workforce.