High student debt has been a problem for many years, with the average 2017 college graduate owing  $28,650. So it’s not surprising that many employees consider student-loan repayment a must-have benefit.

However, according to a survey released by the International Foundation of Employee Benefit Plans in June, only 4 percent of responding organizations said they currently offer some type of student loan repayment assistance benefit.

While the American Bankers Association began offering such a benefit to its employees in 2016, many association execs are wondering both if it’s feasible on small budgets and how they would implement a student debt repayment benefit.

Carla Camacho, director of operations for the ERISA Industry Committee, which began offering the benefit in January, provided some insights on what to expect from a small-staff association perspective.

Camacho noted that while ERIC has fewer than 10 full-time employees, its mission inspired staff to consider a debt-repayment benefit. “We try to practice what we preach, since we advocate for retirement and compensation,” Camacho said. “Because it’s not something a lot of associations are doing, we had to do our research.”

Camacho’s research found that repayment benefits didn’t have to be huge—even $50 per month was appreciated—but that eligibility requirements were important. ERIC implemented three requirements for employees: they needed to have one year at the organization, they would have to be full-time, and they would have to show proof they were making student loan payments.

While Camacho did not share how much the organization opted to pay for benefits, she explained it was a thoughtful process. “We tried to factor in the size of our organization and our budget,” she said. “We also want to make sure we keep the benefit consistent. It is easier to give, but it’s harder to take away.”

ERIC also decided it wanted the benefit to be distributed equitably.

“They get the same amount—the standard that we have,” Camacho said. “We don’t have brackets, where these people get compensated with this amount, and those people get that amount. It’s not based on, ‘What did you go to school for?’ We don’t ask that. It’s standard across the board.”

The Implementation Process

While the idea of a student loan repayment benefit was popular at ERIC, it still required taking time to think through logistics. After figuring out the budget, Camacho had to work with HR and ERIC’s accounting firm to make sure the program was implemented properly.

“My big thing is making sure it’s in compliance, and it’s set up correctly,” she said.

ERIC initially envisioned the program as being a reimbursement. Employees would submit proof they made their student loan payment, and ERIC would reimburse them the amount they were allotted.

“We thought they could send us the receipt, like personal reimbursement,” she said. “As we were talking to our accounting firm and audit firm to make sure everything was going to be OK, we realized it was taxable. So, we ended up changing how we issued the reimbursement.”

While ERIC has employees submit their proof of payment similarly to a traditional reimbursement, the backend process follows appropriate benefits and compensation laws.

Since the rollout, three staff have signed up for the benefit. “They’re happy,” Camacho said. “I think it’s good for retention. One of our employees is waiting to be eligible. I have a good feeling about it going forward.”

For those interested in trying it, Camacho said to talk to others who are doing it, think it through, and don’t rush into an elaborate plan. “I would suggest starting out small to gauge it, to see how it goes, and then evaluate it,” she said.

(enisaksoy/DigitalVision Vectors/Getty Images Plus)