|A new budget-neutral employee benefit aims to take a bite out of the mounting student loan debt plaguing the biggest generation in our workforce.
CLEVELAND, OHIO, January 16, 2019 -- As employers across every industry ponder new ways to recruit and retain the best employees in the job pool, some out-of-the-box ideas for employers are gaining new traction.
One of those new ways is a new student loan repayment benefit, and for good reason. Student loan debt is a mounting national crisis, affecting 44 million Americans to the tune of $1.5 trillion. And it's having a tremendous impact on millennials' lives, influencing where they choose to work, how they live and how they spend their hard-earned money.
The statistics paint a grim picture:
Currently, 70 percent of college graduates have student loan debt and are looking for employers who offer student loan repayment assistance. Recent surveys show that student loan repayment assistance ranks among the top desired perks among millennials. (Unum)
- $32 billion in student loan debt is in default
- More than a million borrowers default each year
- By 2023, nearly 40 percent of borrowers are expected to default on their student loans
- 35 percent of student debt is held by individuals over 40
Employers are beginning to get the message. The challenge? Providing meaningful assistance without breaking the bank.
That's where Thrive comes in: It's a new program that helps employees pay down their student loan debt using existing employer contribution matching dollars. Currently, $24 billion of employer matching dollars is unused every year.
With Thrive, employees determine how they want to allocate their employer matching dollars. For example, if an employer's retirement plan matches 100 percent up to 5 percent, employees determine how much of that 5 percent to allocate to their retirement account, to their student loans or to a combination of both. It's the first-of-its-kind, customized tool without an additional cost for the employer.
"Direct contributions to student loan debt by the employer can be a major expense for an organization, but we knew there had to be a better way," said David Krasnow, president for Thrive and a leading national retirement plan advisor. "I'd heard the call from my clients for the past several years -- they needed a way to help employees struggling with student loan debt.
Thrive provides exactly what organizations have been searching for and gives them an edge in hiring and retaining top talent."
Thrive takes care of the administrative work, handling all back-end administration, including education, enrollment and making payments to each participant's student loan provider from both employee and employer match. Thrive also provides intuitive tracking tools and notifications to give employees complete peace of mind.
The impact for organizations could be major. Research shows that 76 percent of employees feel student loan repayment would be a deciding factor in accepting a job, and 86 percent would feel compelled to stay with an employer at least 5 years in exchange for student loan payment.
As companies consider new ways to help their employees with student debt, Thrive is breaking new ground, helping companies match existing dollars to help repay student loans without increasing the benefits budget.
To learn more about how Thrive could work for your organization and your employees, visit www.ThriveMatching.com, contact David@thrivematching.com, or call 1-888-991-1322.