Attracting and retaining top-tier talent is a continuing issue for organizations across industries. Workers with the right skills are not only getting harder to find – they’re also getting harder to keep.
In fact, eight out of 10 HR professionals report dealing with labor shortages over the last year. In the finance industry, for instance, 82% of big employers say they struggle to find talent.
Additionally, 87% of companies committed to hiring AI-savvy employees are also experiencing a talent gap. This is a challenge in many industries, such as healthcare, where one survey found that nearly half of technology leaders have either launched their AI rollout plans or are in the process of launching them.
Organizations that prioritize worker incentives will be better positioned to attract higher quality applicants and keep them on the team over the long run. A widespread issue for today’s employees is student loan debt, which prevents them from addressing other financial priorities, like retirement saving, homebuying, and continued education. In fact, a recent survey found that 97% of recent college graduates who have student loans plan to either delay or entirely abandon certain life milestones (like having children or buying a house) because of this debt.
In this article, we explore how student loan coaching addresses these challenges as an innovative employee benefit that increases retention rates by providing employees with expert advice that enables them to live their best lives.
Elements of coaching
Navigating
the student loan repayment process is burdensome for
many borrowers, thanks to complex repayment terms
and a volatile political and legal
landscape.
Incorporating
student coaching as an employer
sponsored
loan
benefits
program is a
highly
effective
way for an
organization
to
provide employees with expert guidance
on
creating
a financial plan that includes student
loan payoff strategies and
understanding
regulations and forgiveness policy
changes
that impact
them.
Consider student loan repayment in employee financial wellness goals
Student
loan debt impacts
a
huge number
of working Americans,
with
45 million borrowers each averaging
a balance of $37,090
which jumps to $75,000+ for
clinicians.
A large part of that population
struggles to make payments.
When
the pandemic-era pause on federal
student loan payments ended at the
end of 2023,
40%
of borrowers missed their first
payments.
Expert
coaching provides real value to
employees who may be feeling a major
cash crunch, regardless of their
salary level. Here are three ways
external student loan coaching helps
borrowers.
Create
loan repayment
goals
Borrowers
often
don’t
know where to start with a strategic
repayment plan. A student loan coach
looks at the individual’s
holistic
financial
picture to create appropriate
goals
like paying off a loan early or
lowering their monthly
payment.
Expert
coaches at leading
student loan solution
providers,
like EdAssist,
understand the different
types
of student loans
and verify each of the
participant’s student loans.
Having accurate
information is crucial to weigh the
pros and cons of refinancing,
consolidating,
and altering repayment
terms.
With
an
accurate
understanding of these factors,
borrowers can develop loan
repayment goals to pay off debt more
efficiently.
Identify
forgiveness
opportunities
Over
1.3
million federal student loan
borrowers
are eligible for Public Service Loan
Forgiveness (PSLF) based on their
employment. This program provides total
loan forgiveness after 10 years of
making payments while working at an
eligible employer in public service
fields like healthcare, education, first
responders, and non-profit work. On
average, the average forgiven loan
balance is $68,547.
While
PSLF can result in massive loan
forgiveness for employees, it is
incredibly complex to navigate
without professional help. Plus,
many borrowers don’t
realize that eligible payments made
during the administrative
forbearance still count towards
PSLF, even if they didn’t
make any payments during that
period.
Student
loan coaching helps employees review
their eligibility and
how
to submit
(or
resubmit in some instances)
the
PSLF application with the
appropriate
documents
and employer
certification.
Consider
overall financial wellness
plan
Providing
employees with student loan coaching
doesn’t
take a siloed approach to managing
that debt. Instead, coaches
create a holistic plan that
addresses the borrower’s
available cash
flow.
With
that information, we can offer guidance
on how to prioritize financial goals,
such as making extra payments on
high-interest private student loans to
save interest over time or pay off loans
more quickly.
Navigate breaking news
Another
facet
of student loan coaching as an
employee loan benefit is offering
guidance on the ever-changing
regulatory and political landscape.
Since 2020 alone, there have been
multiple program
updates each
year.
In
addition to temporary payment
pauses, there have also been the
Biden-Harris Student Loan
Forgiveness Program, and the
Saving on a Valuable Education
(SAVE) repayment plan. While
these relief plans are
attractive to borrowers, the
most recent two have
experienced
major legal
hurdles
that have blocked actual
forgiveness or repayment changes
for
borrowers.
It
can be frustrating to read headlines
about upcoming forgiveness without
having the bandwidth to track court
challenges and other updates. A student
loan coaching program is designed to
stay on top of breaking news and
communicate the latest developments to
your employees.
Impact of student loan coaching in the workforce
Student
loan coaching benefits create a
measurable impact on an employee's
financial well-being. Here are some
examples of how coaching has
impacted
real-life employees from EdAssist
clients.
Mindful
spending to improve overall financial
wellness: One
participating employee worked
one-on-one with a coach to review her
spending plan and identify
additional
resources to put towards student loan
repayment. Because repayment options can
be so complex, the borrower also
utilized her
coach’s expertise to
identify the
best strategy to achieve her goals. Her
coach identified the
student loan with the highest interest
rate to direct those extra payments. The
outcome for this borrower is quite
staggering: Her current payoff date is
now 7.5 years earlier than expected and
she will save $31,000 in accrued
interest.
Total
forgiveness with PSLF:
An
employee
worked in non-profit healthcare for 15
years. After meeting with a coach and
getting assistance with
resubmitting
her
PSLF application, she was approved to
have $350,000 in student loans forgiven
within weeks.
Student
loan terms are incredibly nuanced, and
repayment terms are frequently in
flux with today’s political
atmosphere. When implementing a student
loan coaching benefit, employers
are
responsible for
ensuring their employees have access to
neutral, unbiased coaching. Otherwise,
they put their staff at risk of being
guided towards financial products and
decisions that may not be in the best
interest of the
employee.
EdAssist’s team
of coaches are
required to have
previous work
experience as a financial aid decision
maker in a collegiate setting, giving us
unique, on-the-ground experience with
how student loans work. In
fact, our professional student loan and
financial wellness coaches
average 20+ years of diverse experience
in education finance
—
expertise
that’s
unmatched in the solutions provider
industry.
As
a neutral
third party, we provide
impartial guidance that isn’t
influenced by a financial product or
service for sale. EdAssist also
relies on individualized support that
doesn’t
involve algorithm-backed advice. The
nuances of student loan repayment terms
and borrowers’ financial goals are
simply too great to exclusively use tech
solutions.
Employer benefits of student loan coaching programs
Offering
student loan
coaching
programming
is
a powerful
strategy
for both attracting and
retaining
top talent. EdAssist
reports
a 93% average retention
rate among
employees who have taken
part in student loan
assistance
programs.
Student
loan coaching is
often
launched as a
targeted
benefit
that
doesn’t
require
enormous
budgets
from
participating
organizations
– allowing
employers
to
provide tremendous value
at
a reasonable
cost.
By
supporting employees with
student loan coaching
programs, organizations not
only enhance their financial
well-being but also foster a
more engaged and loyal
workforce. These programs
empower employees with the
knowledge and tools to
manage their personal
finances effectively,
leading to reduced financial
stress and increased
productivity.
Ultimately,
offering student loan
coaching is a strategic
investment in the overall
success and satisfaction of
both employees and the
organization.
Ready
to find out how to launch a
student loan coaching
program to empower your
employees’ financial
wellbeing?
