A tuition repayment perk could make hiring a lot easier and job offers a lot sweeter. And the strategy isn’t just for Millennials; workers of any age might have hefty student loan debt. Many older workers went back to school during the recession, and repayment assistance could make the decision to work for your company simpler than a coin toss.
According to a recent Iontuition survey, about 40 million Americans are carrying student loan debt. Over half of the 1,000 people surveyed agreed that student loan repayment would be an attractive perk. And most of them considered it more attractive than a 401K.
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The Numbers are Too Great to Ignore
You might think, “Of course workers want help paying off debt!” But this is a noteworthy trend and one that Ceannate Corp. CEO, Balaji “Raj” Rajan, says needs attention. Iontuition is a Ceannate Corp. company. Raj explains, “Employers who rely on a college-educated workforce cannot ignore numbers like these.”
“Our survey shows that a majority of borrowers would greatly value an employee benefits package tailored to reducing and managing their student debt,” he says. And the fact that it’s more important to so many workers than retirement savings speaks volumes. Employers who can capture the attention of a debt-laden workforce have a definite advantage.
It’s not a matter of indulging the workforce, but of offering the people you want to hire something that they’re interested in. If you don’t offer a tuition repayment assistance program, your strongest competitor might. And if the assistance funding is shifted from existing programs such as bonus funds, you won’t have to find the money elsewhere in the budget.
Loan repayment doesn’t have to work for everybody; it’s one benefit of many that you could offer.
Spend on Debt Repayment and Save on Hiring Costs
Tuition assistance could also save you money in the long run. When you’re more competitive, you can make better hires. And when you make better hires, turnover will be less of a problem. Debt reduction is that big of a deal.
Government agencies have offered loan repayment assistance since 2002. And in 2015, a bill was introduced that could make tuition assistance tax deductible for non-government employers. Even if the bill doesn’t pass, the interest that employees pay may be tax deductible.
But the most direct-line benefit is still talent retention. Your cost per hire is probably going up like most every other employer’s. And the more talent you replace, the more than you pay. Give candidates another reason to stay and those costs could go down.
Tuition repayment can’t attract every candidate, of course. Some don’t have student loan debt, and some are comfortable with their own repayment terms. Employment Matrix points out that because “debt assistance programs are only accessible to employees with debt,” other employees might appreciate different perks such as emergency savings contributions.
Tuition repayment assistance is just one more trick up your sleeve for attracting the talent you want to hire. It’s part of an overall flexible strategy that offers the right perks to the right people at the right time. It might not be a huge part of your company’s benefits program. But for people laboring under a mountain of debt, it could be a game changer.
If staying competitive for top talent is your goal, RealMatch has the answers.