What are student loan repayment & tuition assistance benefits?
Education is expensive. Like really expensive. And those expenses — and the ensuing debt — have major impacts on millions of lives.
As of 2021, 43.4 million borrowers in the U.S. owe a collective $1.6 trillion in student loan debt. And that number is only expected to grow.
Student loan repayment & tuition assistance benefits help borrowers navigate, pay, or repay for their education. While this is still an emerging category of benefits, there are three main kinds of student loan repayment & tuition assistance benefits.
Student loan navigation
Unfortunately, repaying student loans isn’t always as simple as making a payment each month. There are a number of complex, confusing policies and rules to navigate. It can feel a bit like solving a maze in the dark — but instead of a dead end, a wrong turn can lead to serious consequences like credit score dings or even more debt tacked onto the total balance.
Student loan navigation services help guide borrowers through their repayment process, offering bespoke guidance based on their unique situation.
Student loan repayment assistance
Under the CARES Act passed in 2020, employers are now able to contribute up to $5250 tax-free to employees’ student loan payments annually, which shakes out to about $437 per month. To put it in perspective, the average borrower’s monthly student loan payment is about $393. Most employers don’t max out their contributions — but even an extra $50 or $100 per month can have a big impact on how quickly employees are able to pay off their loans.
If your employees want to broaden their skill set by taking a new class — or even getting a new degree — tuition assistance or reimbursement benefits can help them do it. Not only can this add some new skills to their resume, but it can also fast-track their professional development, without straining their wallets.
How do student loan repayment & tuition assistance benefits impact employees?
Most Americans agree that money can be a major contributor to stress or anxiety. Student loan debt in particular can have a significant drain on mental health or wellbeing. Knowing how closely mental health and financial wellness are tied, it’s not too farfetched to suggest that managing loans (in a healthy, sustainable way) can be a form of self care.
Easier financial planning
Student loans can be a major hurdle to building wealth and planning for the future. With loans weighing them down, the path to major financial milestones — like homeownership, parenthood, or retirement — seems insurmountable.
In fact, 74% of millennial borrowers report that their student loans are impacting their ability to meet their financial goals, while 81% of adult borrowers have delayed key milestones due to their debt load.
With these tools guiding and supporting their loan management, borrowers have a better sense of their repayment timeline. This can be a big step towards the financial planning they’ll need to do to build the future they envision for themselves.
Why should employers offer student loan repayment & tuition assistance benefits?
Hiring & Retention
We bet that your company wants to attract and retain employees with specialized skills. You know, the ones who bring something special to the table. The ones who are both curious and inventive. The ones who are well-educated, yet still hungry to continue learning through every step of their career.
You know where we’re going with this: These benefits give employers an edge in hiring and retaining employees with education under their belt.
Diversity, Equity, and Inclusion
Offering these benefits can be a unique way for employers to attract a more diverse candidate pool and demonstrate their commitment to diversity, equity, and inclusion (DEI).
While education is often seen as a path towards a more equitable workforce and society, borrowers from systemically marginalized or underrepresented demographics are more likely to face difficulties paying off their student debt:
- First-generation college students are 2x as likely to fall behind on their student loan payments.
- 30% of Black college grads with student loans default in the first 12 years of repayment.
- 58% of all student loan debt belongs to women.
Think millennials and gen-Z are the only people in the workforce with high levels of student debt? Think again. While student debt discourse usually centers around younger generations, this issue impacts people from all walks of life. Whether they’re still paying down loans from their own education, or currently paying for a dependent’s college tuition, nearly 9 million Americans ages 50 and older hold some level of student loan debt.
Greater productivity due to lower stress levels
Unmanaged student loans can be a huge blocker for building financial stability, future plans, and a fulfilling self care routine — all of which contributes to stress and lower productivity. By giving your employees the support they need to keep their loans under control (or even paid off quicker), they’ll have more mental space to focus on a job well done.
What are the best student loan repayment & tuition assistance benefits providers?
We got you. Using the Nava Benefits Search Engine, you can explore a range of student loan repayment & tuition assistance benefits providers — as well as 600+ vendors across 28 benefits categories — and get a quote for free.