As college costs skyrocket and student loan debts reach staggering heights, more and more employees face significant debt from their time in school. Achieving financial wellness can be difficult without external support.
Despite the push for student loan forgiveness, the Supreme Court ruled earlier this year that the plan would finally be brought to a halt.1 Because of this, many employees will be required to start making student loan payments again in October.
As an employer, you want to ensure your employees have the necessary resources in place to make their payments on time each month.
Being able to assist with student loans can be a real asset for companies. It helps attract and retain the best talent while also ensuring employees are equipped with the tools they need to succeed financially.
So, how can employers help prepare their employees for student loan payments starting in October?
We'll explore different ways that employers can support their employees during this transition – from providing resources on budgeting and financial management to offering more direct financial assistance with student loan repayment programs or debt consolidation plans.
With a concerted effort from employers and employees alike, preparation for upcoming payment cycles and ultimately paying off these loans is possible.
Budgeting for Loan Repayments
The first step for employers to help employees prepare for student loan payments beginning this fall is to provide resources on budgeting and financial management. This includes helping your employees create a budget to determine reasonable payment plans that can be sustained over the long term.
Focus on educating your team on the importance of identifying how much discretionary spending they have after making their monthly loan payments, as well as other living expenses. Doing this will ensure that they can make their payments each month without sacrificing too much of their income.
You may also consider hosting webinars or workshops with a financial expert who can answer questions about refinancing loans, building retirement savings accounts, and debt consolidation options.
These seminars can be invaluable resources for giving employees clear steps when it comes to repaying student loans at the lowest cost possible.
Additionally, providing free online tools such as a loan repayment calculator can help simplify the householding process by allowing them to see which plans or strategies might work best based on different variables like salary income levels.
Student Loan Programs or Debt Consolidation Services
As an employer looking to support its employees during tough times – especially those paying off significant amounts of student loan debt – you might consider offering assistance in the form of student loan repayment programs or debt consolidation services.
Student loan repayment programs allow employers to offer additional aid directly toward their employees’ student loan payments through salary deductions.
This can benefit both employers and employees alike as it helps secure top talent while also helping to alleviate some of the financial burden on an employee's disposable income.
Additionally, these employer-sponsored payments may help recipients save money in interest over time (depending on the program).
Debt consolidation is another option, allowing borrowers to combine multiple loans into one. Usually a single low monthly payment, debt consolidation can make repaying student loans even easier for employees who may have taken out loans from multiple lenders during their college days.
Consolidation plans are generally tailored for each individual. They require specific information, such as credit score, age of accounts, and even income level.2
Many consolidations also do not require a downpayment by the borrower so that they can begin building equity faster without taking on additional costs initially.
Companies considering offering this type of plan should ensure any service chosen is certified with their state and federal governing bodies to provide the most up-to-date terms and consumer protections.
Consider Additional Supportive Measures
As an employer who cares for its employees, consider providing additional lending services to assist with the repayment of federal student loans.
This may include making direct loan payments to lenders on behalf of employees or offering "student loan hero" programs in which employers pledge a certain amount per employee toward their student loan balance each month.
These contributions are then tax deductible for the employer and can serve as an added incentive for talented recruits looking to join or stay with your company.
Other benefits you might consider include tuition reimbursement plans if an employee wishes to continue schooling to enhance their skill set while also aiding efficiently with repayment of existing debt (if any).
Additionally, childcare services and subsidized housing are ideas that some companies have adopted as part of perks offered to support both personal and professional growth within the workforce.
Support Your Employees With Enrich
Employers have an opportunity to provide substantial assistance to their employees during this monumental transition. To help provide the most comprehensive support for student loan repayment, take a look at the Enrich financial wellness platform.
Enrich offers an arsenal of tools and resources to help guide your employees toward student loan repayment success.
The platform includes personalized insights that give employees a better understanding of their financial standing, interactive tools that assess their loan repayment options, and debt management education to give them financial empowerment.
With Enrich Financial Wellness, you can support your employees through this transition with ease – so don’t wait any longer. Contact Enrich for a demo today and help prepare your team for student loan payments to resume.
Move Toward Creating a Financially Well Workforce
Operating a business can be demanding, but instilling financial stability within your team is important. This is especially true during tough economic times when many struggle with heavy debt loads beyond just student loans.
By actively assisting employees who need help through available aid programs like those discussed here, you help ensure that dealing with existing college debt doesn’t become a source of struggle for your employees.
1 - https://www.nytimes.com/2023/06/30/us/student-loan-forgiveness-supreme-court-biden.html
2 - https://studentaid.gov/manage-loans/consolidation