Everyone seems to be talking about student loan assistance as an employee benefit, but how exactly would this work at your company?
So far in our four-part series we have covered estimating employee enrollment, defining the employer contribution amount and modeling the positive ROI associated with a student loan assistance program. Now that everyone is on-board and wants to move forward with the program, the fun really begins… finding the budget to pay for it.
Part four: Funding your student loan assistance program
Finding budget for a new program can be a difficult undertaking. This is why making the business case for a student loan assistance program is such an important step in the process. If you can win the argument that adding student loan assistance as an employee benefit is a win for the company, your budget discussions should go a bit smoother.
Most likely, your top argument for creating a new budget to fund your student loan assistance program will be the turnover cost savings associated with it. For many employers, the full cost of the program is covered in the first quarter the program is live. Get in touch today if you’d like us to calculate this for your organization.
Of course, this is a projection and is realized over time, so you may need to “find” the dollars in today’s budget. For many employers, it becomes a matter of shifting around current benefits spending. College-educated millennials prefer student loan assistance programs 2:1 over traditional benefits and 7:1 over common perks.
Use this data as a starting point to ask yourself where you will get the most “bang for you buck” when it comes to benefits spending. The dollars may be right in front of you, but just need to be moved around a bit.
You could even consider a cafeteria-style plan that allows your employees to choose student loan assistance OR some other perk.
For example, do you currently have a gym membership reimbursement program? Your student loan assistance plan could be available to employees who choose it over the gym membership, which keeps your budget neutral. Keep in mind, you need to be careful not to violate any contingent benefit rules when designing a cafeteria-style plan – get in touch today if you have any questions about what you can and cannot do when it comes to this type of approach.
As is the case with any new program, finding a budget is often the biggest challenge. If you take the steps to create a solid business case that proves there is meaningful ROI, you’ll have an easier time getting the budget approved. We spend lots of time working with employers to help them evaluate their current situation and design a student loan assistance plan that works for their specific company. If your only hesitation about pursuing this type of program is finding the dollars to pay for it, please schedule some time with a Peanut Butter team member through the below button. We’ll work with you to design a realistic plan that works within your budget.