In this tight labor market, human resource professionals face increased pressure to unearth new ways to recruit and retain talent. Organizations in search of young and skilled labor are often looking for creative solutions to attract talent.
One creative solution employers could consider is a Student Loan Repayment Program (SLRP).
Traditionally, organizations have utilized Tuition Reimbursement programs to provide financial assistance to employees who are furthering their education while already part of your workforce. SLRPs are designed to help those who have already made the investment in their education and are now repaying the student loan debt they incurred in the process.
Student loan debt is now the largest consumer debt in the market. That makes SLRPs an attractive incentive, as such a program can help assist the 44.2 million Americans tackle the nearly $1.5 trillion in student loan debt they already have. The average graduate from the class of 2016 has outstanding student loan debt of more than $37,000.
An Attractive, Innovative Benefit Offering
A SLRP can aid an organization’s efforts to attract and retain employees, as such a program can provide enrollees with a quicker, easier path to lower student debt. For a nominal fee, SLRPs provide employers with an administrative solution for convenient payroll deductions for loan repayments, consolidation and repayment tools and even 529 plan contributions.
When implemented, organizations can leverage such a program in a way that fits their talent acquisition strategies. The most effective approach we’ve seen in the market includes companies making a financial contribution to the payment. This encourages employee participation, enhances their financial well-being and even allows them increase their participation in a retirement plan program.
Flexible Contribution Structure Options
Under current IRS rules, employer contributions to SLRPs are treated as taxable income for both the employer and the employee. But employers can utilize various strategies to structure employer contributions to meet specific goals such as basing them on tenure or employee class.
Student Loan Repayment Programs are an emerging benefit to help employers enhance their talent acquisition strategies and the financial well-being of their employee population.