The days when employee benefits were health insurance and paid vacation are just a memory. Today, businesses offer a wide range of benefits, many that have two important functions: to meet employees’ needs and to differentiate the company from others. A benefit that falls into this category is Student Loan Assistance.
Student Loan Assistance, one of the newest benefits being offered by employers, can help businesses meet many management and personnel challenges. At the same time, it can fill the needs of many employees and make their company a satisfying place to work.
Businesses need to differentiate
All businesses face the challenges of recruiting and retaining qualified workers. They need to build a strong workforce that is able to meet the challenges of a rapidly changing global market. The challenge is here and now, and growing stronger.
The field of data science is a prime example. The number of job openings that include “data analytics” has increased 372% since 20111. A Gallup poll for the Business-Higher Education Forum predicts that by 2021, 69% of employers will give hiring preference to job candidates with data science and analytics skills. However, colleges say that only 23% of their grads will have those skills2. And businesses don’t even have to wait until 2021 for this competitive job market. It’s here now. Yoh Services, a workforce solutions provider to US tech companies, estimates that the best technical job candidates are generally off the market in 10 days or less. This kind of urgency creates a need for a business to stand out from other employment opportunities3.
One way for a business to do this is to offer loan assistance to its workers. The positions that businesses are struggling to fill require higher education, and a large percentage of the American workforce has student loan debt that financed that education. More than 44 million Americans, almost one in every five adults, now have student debt. This means that a large percentage of the people who have the skills employers need are burdened by this debt.
Employees want assistance
Employers can differentiate their employment opportunity from others by offering meaningful benefits such as loan assistance. The 2015 American Student Assistance survey reported that 76% of people said that if a prospective employer offered a student loan repayment benefit, it would be a deciding or contributing factor to accept the job4.
A 2017 American Student Assistance survey illustrates how student debt is a significant factor in the lives of many young workers:
- 31% said they worry most about their student loans out of all their financial obligations
- 56% said they worry about their student loans all the time or often and 25% worried about them sometimes
- 59% say that paying off student loans is a higher priority than putting money in a 401(k) for retirement
- 92% say they are likely to take advantage of a sign-on bonus to specifically help with their student loans5
Companies who offer this assistance will stand out from others. Currently, only 4% of employers offer student loan assistance as an employee benefit, according to the Society for Human Resource Management (SHRM). The strong interest in this benefit is bound to bring change: Advisory company Willis Towers Watson predicts that this will grow to nearly 20% by 20186. There is value for both employees and employers in student loan assistance that financially benefits employees while it builds a strong workforce.
1 Meet Level: A Northeastern Bootcamp Designed for You. Accessed 4/13/2017.
2 Investing in America’s Data Science and Analytics Talent, Business Higher Education Forum. Accessed 4/13/2017.
3 How to recruit hard-to-find tech talent. Accessed 4/13/2017.
4 Loan Repayment: The Hottest Employee Benefit of 2017. Accessed 4/13/2017.
5 American Student Assistance Young Workers and Student Debt Survey Report. Accessed 4/13/2017.
6 Perspectives: Employers explore student loan assistance strategies. Accessed 4/13/2017.