The Promise of Student Loan Reimbursement Programs

This employer-provided benefit can really make a difference in employees’ lives

By Matthew W. Burr, SHRM-SCP April 11, 2019
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Matthew W. Burr, SHRM-SCP

​With 44 million Americans facing student loan debt and total debt ballooning to over $1.5 trillion, there is a growing need for more employers to start offering educational debt relief as a perk or benefit.

Creative perks and benefits programs can add value to any organization. I believe that student loan reimbursement has the potential to be the new dental insurance for my generation of employees. Only 4 percent of organizations currently offer such a perk, however, according to a 2018 SHRM study.

HR professionals who are responsible for determining what benefits to offer in their organizations, or who influence the decision-making process, have a great opportunity to do something about this. Student loan reimbursement is a new and innovative perk that can have a positive impact on many job applicants and current employees. Regardless of the specific amounts reimbursed in any individual program, remember that overall, these kinds of program will help our workforce become debt-free.



 

Below are five recommendations for HR professionals to consider in developing student loan reimbursement policies, procedures and programs. As always, the SHRM Body of Competency and Knowledge (SHRM BoCK) provides guidance. In this area, the HR Expertise technical competency is especially pertinent, particularly HR Strategic Planning, Talent Acquisition, and Employee Engagement & Retention. (Relevant behavioral competencies are noted in parentheses.) 

  1. Tuition reimbursement programs. These programs can help grow and sustain talent from within. They are great options for succession planning, learning and development. Take a look at the big picture, though. If your organization already requires advanced degrees, certifications, or the like even to be interviewed for a current opening, tuition reimbursement may not be a meaningful benefit for your workforce.

  2. Benchmarking. Prior to recommending any new program, you first need to truly understand what your competitors and other organizations throughout the country are currently offering as perks and benefits. Identify the growing trends in multiple industries (Critical Evaluation; Business Acumen). A financial wellness check can be a first step before or in conjunction with a reimbursement program. Survey your workforce to determine its needs.

  3. Tax impacts. The tax implications of student loan reimbursement programs are still evolving. HR professionals should join SHRM in asking for changes in tax laws and regulations to support these programs (Communication). Be creative when designing programs, but always be sure to understand their impact on the business (Consultation).

  4. Policy development and implementation. Once you decide that a student loan reimbursement program is the right choice for your organization, it's time to develop one that will have a positive impact (Leadership & Navigation). Generate interest and excitement. Engage the entire workforce—don't just offer it only to new hires (Relationship Management). Design and implement appropriate policies and procedures throughout your organization, and be consistent in responding to requests to use the program (Ethical Practice).

  5. Communicate, communicate, communicate. Communication is critical for the success or failure of any new benefit or perk. Announce your new program to the whole organization. Brag about it during the recruitment process. Ask for feedback from current users (Communication). Find out if you need to make adjustments. Determine the program's impact on retention and engagement of the workforce. Measure utilization rates; we don't know what we don't measure (Critical Evaluation).

Student loan reimbursement programs make a difference in people's lives. I know, because I am currently paying off my own student loans, and I have already paid off almost $74,000 in less than two years. 

The last thing employers want is for their employees to be distracted by financial issues. We want to avoid statistics like the ones illustrated below.


 

Matthew W. Burr, SHRM-SCP, owner of Burr Consulting, LLC, Elmira, N.Y., is an HR consultant, an assistant professor at Elmira College, and an on-call mediator and fact-finder for the New York State Public Employment Relations Board. He holds master's degrees in business administration and in human resources & industrial relations, and a Lean Six Sigma Green Belt.

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