Show you care: Helping with student loans a tool to battle the Great Resignation
By now, we all have heard about the Great Resignation. It’s not just a catchy phrase. It’s real, and it’s happening here. Odds are good it has affected your business or people you know.
As reported in Inc. magazine and other publications, U.S. Department of Labor statistics show that in April, May, and June 2021, 11.5 million workers quit their jobs. It’s a trend that shows no sign of slowing down.
How can you differentiate your business to hire and retain the best talent? Show you care.
A sure way to do that — and appeal to those highly coveted well-educated workers — is providing benefits that make you stand out. And one benefit growing in popularity is helping employees pay their student loans.
Student loan repayment assistance (SLRA) can help attract and retain the best talent. Thanks to a provision in the federal Consolidated Appropriations Act, an SLRA benefit is tax free — for employers AND employees — through at least 2025.
Many employers have their 2022 benefits schedules locked in. But not offering SLRA now can cost you dearly.
Human resources professionals who design benefit offerings can act quickly with the help of this free Employer’s Guide to Student Loan Repayment Assistance e-book. It gives your business a roadmap to offer this tax-free benefit now.
5 easy steps to implement SLRA in under 60 days
The Employer’s Guide to Student Loan Repayment Assistance e-book helps employers quickly implement a high-demand benefit that aligns with the workforce’s new needs and values. This free e-book and its templates provide step-by-step guidance on how to implement SLRA in under 60 days using these five easy steps.
- Create or update your educational assistance program to leverage the tax-exempt status. Employer SLRA contributions to an employee’s student loans, up to $5,250 annually, are tax-free through Dec. 31, 2025, when provided as part of an educational assistance program. The benefit is also tax free for employees.
- Create your SLRA program. When considering program components, include your objective, benefit contribution amounts and maximums, employee eligibility, SLRA policy details, and employee onboarding.
- Estimate your budget. Some companies dive in headfirst, while others start slowly and grow their contributions over time. When budgeting, take into account an estimated 20% employee eligibility and participation rate and rely on your policy details to estimate costs. SLRA can be implemented any time of year, outside of a budget cycle. Funding sources can initially come from unused tuition reimbursement, professional development dollars, travel funds, or other budgeted items that weren’t fully utilized.
- Calculate ROI to present to leadership. The cost of losing an employee is estimated to be as high as 1.5 to two times their salary. A simple calculation using an estimated annual turnover and estimated SLRA contributions will easily show how a program will more than pay for itself with even a modest 1% turnover reduction. It’s really that simple.
- Choose an experienced partner. Student loans are complicated and establishing an effective SLRA program requires specialized knowledge. Partnering with a student loan industry expert offering SLRA administrative services can greatly reduce the implementation timeframe and improve the quality of services to you and your employees.
Your actions today will build your workforce of tomorrow. SLRA can elevate the level of talent you attract, and that will make the future a better one for your employees and your business.
Beth Erickson is vice president–repayment solutions at Ascendium Education Group.
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