Everyone seems to be talking about student loan assistance as an employee benefit, but how exactly would this work at your company?
In this four-part series, we are breaking down the most critical components of evaluating a student loan assistance program.
Part one: Estimating how many of your team members likely have student loans and therefore would enroll in a student loan assistance program.
Understanding how much of your employee population will be positively effected by a student loan assistance program is a critical first step to evaluating a program for your company.
First, it will help you quantify the impact the program will have. Second, it’s often the first question an executive will ask when you mention you are looking into student loan assistance as an employee benefit.
Peanut Butter has built a proprietary model that takes in data from the Bureau of Labor Statistics, U.S. Census and a large Urban Institute Study to help employers estimate enrollment.
Participation ranges anywhere from 30 to 60 percent, and is largely dependent on the age distribution of your workforce.
Over 70 percent of the 2016 graduating class will leave college with some level of student debt. This is higher than any other generation and speaks to why this is such a critical time for employers to be considering a student loan assistance benefit. It also points to the fact that participation in a student loan assistance program will be higher among younger workforces. It’s important to note, though, that student debt is not unique to recent college graduates. Nearly 50 percent of college-educated workers that are in their thirties have student debt, and that number is still north of 30 percent for people in their forties. A student loan assistance program may apply to a larger percentage of your younger workers, but this program will benefit more of your total population than you may initially think.
You can get a sense of what enrollment will look like at your company by using our ROI calculator. This tool estimates age distribution based on industry and returns data on employee enrollment and return on investment.
In the next article of this four-part series, we’ll review how to approach defining the employer contribution amount toward your employee’s student loans.
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