Recent headlines have declared student loan repayment assistance to be one of the hottest new trends in the workplace.
But in the more than five years since big companies like Aetna and Fidelity started helping their employees pay off student debt, the benefit is still only available to about 8% of companies, according to a Willis Towers Watson survey. .
How about working with the remaining 92%? Like any part of your compensation package (or your life), it can be helpful to just ask for what you want. The result could have a bigger impact than you think.
“We have employers telling us that someone has come to talk to them,” says Romy Parzick, CEO of Vault, which manages education assistance benefits for 1,500 clients. “And that sparked the advantage for [the whole company].”
Here’s how to start a fire in your business.
Gather your supporting evidence
If your company employs a large proportion of workers with four-year degrees, chances are that many of your colleagues are in debt. Seven out of 10 undergraduate students are now borrowing to pay for their degree, and student debt spans generations: 8.7 million student borrowers are over 50 years old.
You can take your research a step further by looking for industry-specific borrowing statistics, or even asking your employer to consider surveying employees to gauge their level of debt.
If your company has highlighted its diversity, equity and inclusion goals, Parzick says, be sure to highlight data showing how student debt disproportionately affects black people and Latino borrowers, and how women hold 60% of all student debt.
At PwC, one of the first major companies to announce its student loan repayment program in 2015, business leaders to say that 62% of eligible black employees and 52% of eligible Latino employees participate in the benefit, higher percentages than eligible white or Asian employees. The consultancy, which pays out up to $1,200 a year in student loans to eligible employees, has seen more than 16,000 workers sign up for the benefit in the first five years of its founding.
Sell it as a core benefit – not just an employee
Once you’ve demonstrated that student loan assistance will help employees, it’s time to demonstrate that it’s also a good business decision.
Perks are widely recognized as a key part of recruiting and retaining employees, so focus on those, says Virginia Adams, senior HR knowledge advisor with the Society for Human Resources Management.
About a quarter of employees surveyed in a recent improvement survey said they would leave their current job for one that offered student loan assistance. The share jumps to about half if you only consider Gen Z workers.
In the case of Nebraska Medicine, a chain of hospitals in the Omaha area, offering a student loan to staff nurses led to a 55% increase in retention rate and allowed the company save $5 million in turnover costs, according to Prudential, which partnered with the hospital to design the benefit.
Even if you can’t find hard numbers, you CAN collect information about employers who are hiring in your area or industry and who already offer this benefit. (You’ll likely get a healthy list just by looking at your competitors’ hiring pages, Adams says).
Finally, make sure your employer (and the HR department) is up to date on a helpful tax policy: As of 2020, $5,250 of student loan repayment assistance is considered tax-exempt for both employer and employee. The advantageous tax status runs until 2025.
Go behind your boss’ back
OK, we’re being ironic there. But if you don’t feel comfortable approaching someone who has the power to introduce this benefit, try emailing one of the benefit providers that operate in this space, such as Tuition.io, Gradifi, Goodly and Bright Horizons’ EdAssist.
Even though Vault does business-to-business sales, Parzick says it’s not uncommon for people to email his company and say, “Hey, how do I get this benefit at my workplace? Can you help me ?
After receiving one of these emails, Vault vendors then contact the company in question, informing them that an (anonymous) employee has contacted them. His team found that this kind of cold contact is much more likely to lead to a callback than a call without an employee request.
“It’s an interesting indicator of the value employers place on what their employees are looking for,” she says.
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