Employers have begun to offer their employers with relief from their student loans by introducing a student loan reimbursement benefit. However, just 3% of employers have come onboard and implemented the program.
Do not lose hope, as gradually, it expected more companies would consider introducing the benefit to their employees, especially the millennials who are entering the job market. One of their reasons to join a company would be the student loan reimbursement, which would allow them to pay off their loans quicker than they anticipated.
How the Student Loan Reimbursement Program Benefits Companies and Employees
Some companies already provide their employees financial support to further their education. Therefore, incorporating a student loan reimbursement program is just another step in the right direction. By providing future employees a plan that helps them eliminate their student loans, companies can increase their retention rate by 76%.
How Does the Student Loan Reimbursement Program Work?
The student loan reimbursement program is the newest entry in the market that is still trying to make its place. So far, there are no standard rules established to support and execute the program. People have a general idea on how this plan is suppose work.
A company that offers the student loan reimbursement program agrees to pay part of the amount or reimburse the employee for what they have already paid. This allows the employee to pay off their student loans in three years. However, this also depends on the company they join and if they offer this perk as part of their employee benefit package.
An Example of How the Student Loan Reimbursement Program Works
You have to pay off $29,000 in student loans, but your company will pay give you $4,100 to pay off the student loans, leaving you with a student loan of $24,900. Within three years, you will not owe any money.
Another example looks at the duration a company pays off an employee’s student loans. In this example, the company decides to pay $1,300 for six years while another company may pay off a chunk of the money in one go instead of dividing the payments in years.
Since no concrete rules on how the student loan repayment program should be managed have been established, companies end up selecting a method of payments that suits them and benefits their employees in return.
Who Qualifies for the Student Loan Reimbursement Program?
Companies offering this program do not follow any one set of rules, but have set up their own rules qualifying an employee for the program. Most likely, for an employee to become eligible for the program, they must be employed with the company for a certain number of years and make payments to pay off their student loans on a regular basis.
If you are searching for a job and have to pay off your student loans, look for a company that can help you. Companies who are trying to retain employees or offer them an incentive to remain with them should consider incorporating this program into their company.