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Businesses looking to attract new employees must distinguish themselves from the competition, especially if they’re unable to pay salaries above the market value. Creative benefits often do the trick, particularly if they address specific needs. With more and more college graduates entering the workforce and more and more of them graduating with substantial debt, some companies are enticing prospective employees with a student loan repayment benefit.
The benefit is a rare, sought-after gem. Over 70% of college graduates have student loan debt, 76% of respondents to a 2015 American Student Assistance survey said the benefit would be a contributing factor to their accepting a job, and only 4% of companies offered the benefit in 2016.
It has downsides, though. For one, it helps only employees with current student loan debt, not those who’ve already worked hard to pay off their debt or never had any in the first place. The benefit could therefore be viewed as unfair and become a cause of contention in the workplace. For another, it’s considered taxable income, and at present there’s no tax write-off for employers who offer it. Employers, however, do have some leeway on how to offer the benefit. The amount of the benefit can be offered monthly or as a lump sum, it can be capped, and it can be tied to an employee match. A waiting period is also fine.
If you’re looking for an enticing benefit to attract new talent, a student loan repayment benefit may be something to consider. If this benefit isn’t desirable or doable, that’s okay. We realize this benefit isn’t one that will work for most employers, at least at this point in time, but we want to keep you up to date on employee benefit trends. The important thing is that you appeal to potential employees by distinguishing yourself, and there’s no one way to do that!
For more information on how GTM helps clients navigate HR issues, contact us at (518) 373-4111.
