According to recent statistics, there are now more than 44 million unique borrowers who collectively owe $1.6 trillion in student loan debt—making student loans the second largest consumer debt category after mortgages. Those are staggering numbers.
For the considerable Millennials and massive Gen Z workforce to follow, student loan debt is a primary economic concern, often before mortgages and retirement savings can even be considered. Smart businesses have taken notice in a growing trend toward creating student loan repayment assistance programs as a necessary company benefit to attract and retain younger talent.
There are a range of benefit approaches that have already been rolled out across a number of forward-thinking companies in the past couple years. Some employers offer to pay off a portion of employee student loan debt on a monthly or yearly basis with caps on total amounts to be paid. Organizations also differ in whether they offer this repayment benefit to only full time or also for part time employees, while others offer a lump sum repayment only after an employee has worked at the business for a certain amount of time. Most student loan repayment plans target payments to the principal total in an effort to reduce subsequent interest payments. Employers can also offer an automatic payroll deduction option to target student loan debt to facilitate a proactive payment plan without incurring costs to the business.