Nearly one-third of employers, 32.4%, offer or are planning to offer some student loan debt program, such as debt consolidation, refinancing or employer-paid subsidies, according to EBRI’s 2018 Financial Wellbeing Survey.
“Student loan debt is a hot button topic in the workplace,” EBRI says in its report, “How Employers Are Tackling Student Loan Debt.” “The percentage of American families with student loan debt has more than doubled since 1992, from 10.5% in 1992 to 22.3% in 2016.”
Additionally, “repayment of this debt can be challenging. In 2017, one-fifth of those with education debt were behind on their payments.”
Those employers that are focused on student loan debt are more than twice as likely than the typical survey respondent to have measured the financial well-being needs of their employees, including examining existing employee benefit data (68%), surveying employees (56%), holding focus groups (46%) and analyzing other quantitative employee data (45%).
Forty percent of the employers focused on student loan debt rated their concern as high, compared to 25% of overall employers in the survey. Asked why they are focused on student debt, 56% of employers said to retain employees, and 49% said to reduce employee stress.
Employers’ most common approach for determining employees’ financial wellness needs, cited by 63%, was examining existing employee benefit data, such as retirement plan data, including deferral rates, average balances and loan frequency and amounts. Among employers focused on student loan debt, this rises to 68%. This group was also more likely to have surveyed employees (56%), held focus groups (46%) and analyzed other quantitative employee data (45%).
There were very few differences between the way financial wellness programs are offered between typical survey respondents and those focused on student loan debt. Both were fairly equally likely to favor pilot programs (38.0% and 37.5%) or periodic/ad hoc campaigns (32.0% and 28.8%) over holistic programs (16.0% and 15.0%) and one-time initiatives (12.0% and 16.3%).
Asked how they help employees grapple with personal financial challenges, 60.0% of all survey respondents and 61.3% of those focused on student loan debt say through financial planning education.
Asked where they source financial wellness initiatives, the most common response was a mix of methods (42.0% and 41.3%) followed by retirement plan providers (33.0% and 35.0%), the company itself (26.0% and 32.5%) and a contracted financial wellness vendor (26.0% and 30.0%). As to how they are paying for financial wellness initiatives, the most common approach was employer-paid (68.0% and 72.5%), followed by the vendor including such service in its overall pricing (34.0% and 28.8%) and employee-paid (20.0% and 27.5%).
Asked to estimate the annual cost per employee of offering financial wellness programs, the most common response was not sure (26% and 20%), followed by $50 (43% and 48%).
Asked who is championing their financial wellness initiative, the most common source is human resources (55.0% and 60.0%) followed by a senior executive (21.0% and 17.5%) and a vendor (10.0% and 7.5%).
In conclusion, EBRI says, “in a competitive job market, student loan debt help is becoming an important tool for employers eager to attract and retain workers. Policymakers are recognizing the need for such help, as well. Bills such as the Employer Participation in Repayment Act would allow employers to assist employees with student loan payments, tax free, for up to $5,250 per year.”
EBRI’s full report can be viewed here.