- Employees at Montefiore St. Luke's Cornwall (MSLC), a not-for-profit hospital in New York, can pay down their school debt by converting unused paid time off (PTO) into an employer contribution toward student loan payments. Tuition.io, an employee benefit platform, is administering the program for MSLC, according to a press release. The Student Loan Repayment Program addresses the needs of employees with student debt, while resolving the unused PTO dilemma — an annual forfeiture of $62.2 billion in lost benefits, said Tuition.io.
- As part of MSLC's program, eligible employees may convert 30 to 75 hours of unused PTO toward their student loan debt, which can include Parent PLUS and federal loans. Employer contributions will be distributed semi-annually in a maximum payout of $5,000 a year. Full- and part-time employees may be eligible for the program, the release said. Citing data from the U.S. Federal Reserve System, Tuition.io said that student loan debt totals about $1.5 trillion at last count. Seventy-five percent of medical students leave school with an average debt of about $196,000, noted Tuition.io, citing 2018 data from the Association of American Medical Colleges.
- "Medical graduates are often faced with what can seem like an insurmountable amount of debt as they transition from student to medical professional," Dan Bengyak, VP of administrative services at MSLC, said in the release. "We believe financial health is a cornerstone for success and this unique debt relief program gives our employees the tools to tackle it head on."
Sotheby's launched a similar student loan repayment benefit program late last year. The international auction house will contribute $150 toward the principal amount of a student loan (up to $1,800 annually) when an employee makes a student loan payment. Sotheby's partnered with Gradifi, a financial employee benefits firm, to support the benefit plan.
Employees have expressed a desire for student loan repayment assistance over other workplace benefits. Nearly half of respondents in a Student Loan Hero survey said they preferred a plan that helps them pay down their debt to a 401(k) plan if they could choose between these benefits, while 53% favored a loan repayment assistance plan to more PTO benefits.
The federal government has acknowledged that some employers opt to help with student debt in this way. The U.S. House of Representatives introduced a new version of the 2017 Employer Participation in Repayment Act earlier this year, which would expand the tax exclusion for employer-provided educational assistance to include student loan payments, too. The added tax relief could ease some of the costs associated with loan repayment benefits from employers. However, some employers have also cited the complexity of these benefits as barriers to providing them.
In the meantime, student debt repayment programs are still highly valued among workers, with a majority funding the cost of their education with loans. As more ideas for addressing the debt evolve, the benefit could rise to the level of a must-have for employees and job seekers.