With the average person carrying $37,000 in student loan debt, associations should consider offering a new benefit: student loan repayment. Experts say doing so will help them attract and retain talent.
America’s student loan debt is serious.
Outstanding student debt reached $1.521 trillion in the first quarter of 2018, according to the Federal Reserve. And, in 2017, the average person was carrying around $37,172 in student loan debt. It’s even inspired a new truTV trivia show called Paid Off, in which the winner gets his or her student debt wiped out.
That’s why Tracie Sponenberg, senior VP of human resources at The Granite Group and a member of the special expertise panels for the Society for Human Resource Management, calls student loan repayment the new benefit “that employers need to take a look at.”
Several years ago, The Granite Group—a wholesale distributor of plumbing, heating, cooling and propane supplies—instituted student loan repayment as a benefit for its trainees. Over the course of four years, the company offers trainees $20,000 to pay back their student loans. Sponenberg said that the benefit works to not only attract people that the organzation might not otherwise pull, but it also helps to retain them. “They make a decent salary, but [the repayment benefit] really helps to attract people, and it helps to keep people because they have to be here to get it,” she said.
The Granite Group hasn’t lost a single trainee in more than two years, which Sponenberg partially attributes to this benefit. But is a student loan repayment benefit realistic for nonprofits? Sponenberg said “absolutely,” offering two tips to get started:
Don’t be afraid to start small. Even if offering $20,000 over the course of four years isn’t in the realm of possibility, nonprofits and associations shouldn’t be afraid to start small. “I’ve read about accounts of employees being thrilled with a hundred dollars a month—or even less,” Sponenberg said, adding that “even $50 a month could pay off a student loan, depending on how much the loan is, a year sooner.”
Partner with a third party. Companies like SoFi and Gradifi act as third parties between the employee and the student loan company, which makes it easier for the employer to administer the benefit. Partnering with a third party also helps ensure that the funds given to employees for student loan repayment are used for that purpose.
“Over the past few years, it has become so meaningful that I think in another few years, this is not really going to be optional for larger companies, … and it’s going to be a huge differentiator of smaller companies,” she said.
How do you think associations could benefit from offering student loan repayment to employees? Please leave your comments below.