Student debt relief: 3 financial wellness benefits to support employees with student loans. Many employees struggle to manage their student debt. These 3 wellness benefits can help.
In summer 2022, the Biden administration announced its one-time student loan relief program, intended to cancel student debt for Pell Grant recipients and middle-class families. However, with ongoing litigation, the program has been blocked, leaving borrowers unsure whether they’ll receive up to $20,000 in relief or not.
Regardless, many student loan payments are set to potentially resume in 2023 and many borrowers still have remaining debt that needs to be paid off. According to a CNBC poll, most Americans feel stress and mental anguish when it comes to their student loan debt (60%). Learn how companies can help employees manage their student loan debt and dial down their overall financial stress.
3 financial wellness benefits to help employees tackle student debt:
1. Scenario planning
Employees are increasingly worried about inflation — over 40% of employees say inflation has recently had a detrimental impact on their finances, according to PwC’s 2023 Financial Wellness Survey. With talks of a potential recession, focusing on what may or may not happen can cause employees’ fears and worries around finances to increase.
Scenario planning helps employees see how their budget will change amid different “what if” scenarios. For instance, employees can see how their finances may change if inflation continues to rise — they can also gain insight on how their loan repayments may change with or without the student debt relief program. Rather than thinking hypothetically, with scenario planning, employees can address financial uncertainty, make well-informed decisions and dial down their financial worries and stress.
2. Budgeting tools and calculators
Many borrowers haven’t paid their student loans since March 2020, when the U.S. government commenced the Covid-19 student loan repayment pause. There’s a strong likelihood of student loan repayment resuming this year and employees may need help re-integrating their loan payments into their monthly budget — online tools like budgeting calculators can help with this.
With budgeting tools, employees can manage student loan repayments and other expenses, digitally, all from their phone. Budgeting calculators can help employees put in perspective how much money is coming in versus how much money is going out. These insights can identify areas where employees can scale back spending and increase saving. Moreover, 52% of employees prefer digital financial wellness tools, including budget calculators, according to Bank of America’s 2022 survey, given their ease of use and accessibility.
3. One-on-one financial advisors
Juggling short-term and long-term financial goals can be overwhelming. Some employees have trouble deciding how to best allocate their money across various goals, like saving for retirement while balancing student loan payments. Over 80% of people with student loans say they delayed key life milestones to pay off student loan debt, according to CNBC’s poll. And about 40% of student loan borrowers say they’ve delayed saving for retirement due to looming student debt.
For some employees, having personalized financial advising can help them manage short-term financial goals alongside their long-term financial goals. Student loans, for example, is a long-term debt that likely involves some long-term planning. A financial advisor can help employees gradually work toward their long-term financial goals, without losing sight of short-term goals, like paying rent on time or saving for a trip. Moreover, as employees’ financial situations change, a financial advisor can provide guidance on how to best navigate such changes.
To help employees get the most out of their financial wellness benefits, consider bundling benefits together. For instance, giving employees access to budgeting tools and financial advisors can allow them to leverage both for improved financial wellness. Plug-and-play budgeting tools can be used to answer one-off questions and for more in-depth guidance, employees can speak to a financial advisor. Moreover, financial advisors can help employees learn how to best utilize calculators and other financial wellness tools for their personal financial situation.
Looking for an easy-to-use financial wellness program to target employee student debt? Try Best Money Moves!
Best Money Moves is a mobile-first financial wellness solution designed to help dial down employees’ most top-of-mind financial stress. As an easy-to-use financial well-being solution, Best Money Moves offers comprehensive support toward any money-related goal. With 1:1 money coaching, budgeting tools and other resources, our AI platform is designed to help improve employee financial wellbeing. Our intuitive, easy-to-use program platform is fit for employees of any age and level of financial literacy.
Whether it be retirement planning or securing a mortgage, Best Money Moves can guide employees through the most difficult financial times and topics. We have robust benefits options for employers, regardless of their benefits budget.
Our dedicated resources, partner offerings and 700+ article library make Best Money Moves a leading benefit in bettering employee financial wellness.
To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.