student loan debt Archives

Employee Benefits 2021: Employer Student Loan Repayment Assistance Programs

by LizStevens | Nov 18, 2020 | Blog

Employee benefits 2021: student loan repayment assistance programs. The different kinds of employer student loan repayment programs and why more employers plan to add them.

Student loan benefits emerged to help employees with their share of the $1.6 trillion in student debt. They’ve been hailed as an important employee wellness initiative and as a way to attract and retain talent. According to research by MetLife, student loan repayment assistance is now a must-have benefit for 36 percent of Gen Z and 29 percent of Millennials.

Employers who are considering adding student loan repayment benefits in 2021 should review the different types of programs that are available and zero in on the one that’s right for their workforce.

Employee Benefits 2021: Employer Student Loan Repayment Assistance Programs

According to research by PwC, just 7 percent of employers currently offer student loan repayment benefits (with the average employer offering $1,800 per year), but another 27 percent are considering it as they build their benefits package for the next year.

Nearly 15 percent of employers offer student loan refinancing or consolidation, programs that give employees an opportunity to restructure their student loans for more favorable interest rates and loan terms.

401(k) student loan matching is a relatively new program that the IRS approved in 2018. It allows employers to match student loan payments with a contribution to an employee’s 401(k). None of the employers PwC surveyed offered 401(k) matching on student loan payments, however, 23 percent of organizations are assessing its potential.

How Financial Wellness Can Help

The student loan benefit employers were most likely to offer was access to tools that have financial advice and financial coaching. Nearly 25 percent of employers already offer it and 22 percent of employers are considering adding it to round out their benefits offerings.

Student loan debt is just one source of financial stress for employees. According to Clever Real Estate, 54 percent of Americans missed or deferred at least one payment in 2020 for bills including:

Student loan payments (45 percent)
TV, internet, or phone bills (34 percent)
Credit card bills (30 percent)
Medical bills (30 percent
Electric, water, or other utility payment (27 percent)
Rent (21 percent)
Mortgage (21 percent)

Their top reasons for missing a payment included:

Paying for food or groceries instead (37 percent)
Prioritizing other debts (33 percent)
Lost income (28 percent)
Covering an unexpected emergency (25 percent)
Prioritizing rent or mortgage (24 percent)
Paying utilities (22 percent)
Forgetting to Pay (18 Percent)
Spending too much on nonessentials (15 percent)

Financial stress is clearly a multifaceted problem and the route to financial wellness looks a little different for everyone. Financial wellness programs like Best Money Moves are expansive end allow for personalization and customization, helping employees look at their overall finances, their financial goals and then directing them to resources that can help them bridge the gap.

Best Money Moves has all the essential budgeting tools employees need to assess and track their finances, but then they go above and beyond. Best Money Moves has a library with over 700 articles, videos and calculators to help workers educate themselves on everything from taking out student loans to buying their first home to saving for retirement. When employees have financial questions that need answers, Best Money Moves has a team of money coaches ready to help. And, of course, employee information is always private.

If you want to learn more about how Best Money Moves can bring financial wellness to your company download our whitepapers and sign up for a demonstration here.

How COVID-19 Impacts Your Student Loans

by ryanwangman | Mar 27, 2020 | Blog

How COVID-19 impacts your student loans. What you need to know about the new federal freeze on student loan interest and student loan payments.

Following action taken by the Federal government in response to the 2020 COVID-19 pandemic, federal student loan borrowers no longer need to take any action to suspend payments — your federal loan servicer will freeze them automatically. There are some student loans that are not eligible for this automatic suspension, including federal student loans under the Federal Family Education Loan (FFEL) Program loans that are owned by commercial lenders, select Perkins Loans held by the institution you attended and private student loans.

If you have private student loans, reach out to your loan server if you are in need because you have to continue paying principal and interest.

For more details regarding federally held student loans and whether or not your loans qualify for forbearance, refer to StudentAid.gov.

How COVID-19 Impacts Your Student Loans

While there may have been many headlines about freezing student loan payments over the past few months, the process of halting student loans is not as simple as a headline would make it appear. There have been multiple changes over the course of March, 2020 that affect borrowers and loan suspension.

In early March 2020, the Trump administration announced that Federal Student Loan Interest rates will be reduced to 0 percent for a period of 60 days beginning March 13, 2020. Later that month, the federal government announced individuals can suspend their payments for a period of 60 days if they request it. Then, at the end of March, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, provided the automatic suspension of principal and interest payments on federally-held student loans through September 30, 2020.

“The biggest problem is that the media is making it sound like all you have to do is stop making your payments,” said Joel Carter, spokesperson for student loan company GotZoom. “But, then you’ll be reported as paying late. What you need to do is contact your loan servicer and request forbearance.”

According to a Department of Education press release from March 20, U.S Secretary of Education Betsy DeVos commanded all federal loan services to grant an administrative forbearance to any borrower with a federally held loan who requests one.

This process is open to all loan holders — both active and in default — and based solely on request and not on the typical administrative approval process. Borrowers have to contact their loan servicers to request the payment freeze. There is no clear response time for these requests.

What to Think About Before Requesting a Payment Freeze

Before deciding to use this new process, borrowers must consider their situations to make the best decision for themselves. For some, it might make sense to continue to make payments.

Those who are in stable financial situations in the short term might consider continuing their payments as any payment conducted during the 60-day time period will be applied directly to the loan’s principle. For them, paying could speed up their loan paying process.

Participants in the Public Service Loan Forgiveness program, who are required to make 120 payments before the loan is forgiven, might also consider making payments.

Millennial Financial Stress Statistics 2019

by AllyMauch | Sep 9, 2019 | Blog

Millennial financial stress statistics 2019. Here’s how student loans, housing costs and savings are affecting the millennial generation.

Based on the most recent data, Millennials are now the largest generation in the workforce, surpassing both Baby Boomers and Generation X. Burdened with student loan debt, high costs of living and savings struggles, Millennials are also some of the most financially stressed employees.

Nearly two-thirds of Millennials feel like they are doing worse financially compared to their parents’ generation and 76 percent find it stressful dealing with their financial situation — and this stress is only getting worse over time.

Millennials and Student Loan Debt

The U.S. is dealing with a student loan debt crisis, with total debt reaching nearly $1.6 trillion. Millennials are dealing with the brunt of this crisis — 29.1 million student loan borrowers are under the age of 39, more than any other generation.

According to research from PwC, nearly half of Millennials have student loans and 80 percent say their debt has a moderate or significant effect on their other financial goals. When asked what benefits they would like to see from employers, more than a third cited a student loan repayment benefit.

In another survey, Millennials admit to putting off building an emergency fund, saving for retirement, buying a home and getting married due to student loan debt.

Housing Costs and Millennial Financial Stress

In addition to — and in conjunction with — student loan debt, millennials face lower incomes and higher housing costs than the generations before them, making the rising costs of living a major financial stressor. Many Millennials graduated during a recession, and they still make 20 percent less than Baby Boomers did at the same stage of life.

Only 36 percent of Millennials say that their compensation is keeping up with the rising cost of their living expenses, a number that is even lower for Millennial women. Lower incomes and higher living costs make it difficult for this generation to maintain a comfortable standard of living while paying off debt and attempting to save for the future.

Millennials Have Inadequate Savings

Not having enough savings for unexpected expenses is one of the top concerns for Millennials, with 62 percent saying they are most financially stressed about their lack of emergency savings. This, combined with the aforementioned issues of debt and living costs, paints a pretty bleak financial picture for Millennials.

Only one in four Millennial employees say they would be able to meet their basic expenses if they were out of work for an extended period of time and 63 percent consistently carry balances on their credit cards. In addition to struggles with emergency savings, Millennials’ retirement savings are taking a hit — 24 percent have already withdrawn money from their retirement funds to pay for other expenses.

Half of Millennials have reported that financial worries affect their productivity at work, making financial stress a problem for employees and employers alike. Financial wellness programs like Best Money Moves can help alleviate the problem. Best Money Moves is mobile, gamified and easy-to-use — perfect for millennials. It provides practical, unbiased help so employees can make smarter financial decisions and manage the debt they have.

More on Millennials Financial Stress Statistics 2019

3 Financial Stressors Affecting Every Generation

5 Must-Have Benefits for Millennial Employees

How Financial Stress Affects Gen X at Work

Top 3 Financial Stressors Affecting Gen Z

Financial Wellness as an Employee Engagement Strategy

5 Fast Financial Stress Statistics

Hiring Trends to Watch in 2020

4 Big Employee Benefit Trends for Family Planning

How Can Financial Wellness Be Improved?

Top 10 Employee Benefits for 2020

If you want to learn more about how Best Money Moves can bring financial wellness to your company download our whitepapers and sign up for a demonstration here.

Top 10 Employee Benefits for 2020

by LizStevens | Jul 19, 2019 | Blog

Top 10 employee benefits for 2020. HR trends forecast the most desired employee benefits for 2020 like pet perks, flex work and financial wellness programs.

It’s time to start building your organization’s employee benefits for 2020.

Companies can reduce turnover by nearly 140 percent with the right mix of benefits, according to research from Paycor. The annual employee benefits survey from the Society for Human Resource Management (SHRM) provides data on the prevalence of benefits over time to help employers determine which employee benefits are most in-demand and which ones are phasing out.

Here is our list of the top 10 employee benefits for 2020:

Top 10 Employee Benefits for 2020

#10 Pet-Friendly Employee Benefits

Fifteen percent of companies now offer some form of pet health insurance. Health insurance for pets is a benefit that’s grown 6 percent since 2015 (4 percent of that was just this last year). Some companies have gone as far as offering paid time off or the flexibility to work from home for employees who adopt a pet, referred to affectionately as ‘paw-ternity leave.’

#9 The Benefits of Paid Leave

Almost 80 percent of employees live paycheck to paycheck. Without an emergency savings account to fall back on, employees turn to credit cards to cover unexpected expenses or reduce spending on other things, like necessary healthcare. Ninety-four percent of low-income employees do not have access to paid family leave, and they are the employees who need it most.

Paid leave is on the national legislative agenda in this congressional cycle, as Oregon recently became the eighth state to adopt a paid family and medical leave policy. It’s worth exploring organizational costs and strategies for paid leave benefits as the debate plays out on the national stage.

#8 Transportation Benefits for Employees

Nearly half of workers consider their commute to be the worst part of their day and one in five employees say they are ‘regularly late’ for work due to travel disruptions. Companies like Apple have started to provide commuting reimbursements or company shuttles to help ease the angst over commutes. It’s a smart strategy to attract and retain talent in a tight labor market.

#7 Flexible Scheduling Benefits

More than 10 percent of employees quit because of a poor work-life balance regarding their company’s schedule, commute, flexibility or travel. Flexible scheduling makes a big difference for new parents, caretakers, students, employees with ongoing health issues and employees with long commutes.

Flexible work schedules give employees some sort of control over when and where they work. It establishes a level of trust with their employer and allows them to be there for friends and family when it matters most.

#6 Family Planning Benefits for Employees

More employers are offering family-friendly benefits like paid maternity leave and fertility services to attract and retain employees. It’s not just big corporations either, 10 percent of employers with 50 or fewer employees offer some sort of fertility benefit (up from 4 percent in 2016). Egg harvesting or freezing, in-vitro fertilization treatments, paid paternity leave and emergency/sick childcare are just a few of the family-friendly benefits growing as part of the larger trend to expand work-life balance policies.

#5 Tech Benefits for Employees

SHRM found over 50 percent of employers provide a company-owned business cell phone/smartphone for business and personal use. More than 40 percent offer subsidies for cell phone/smartphone bills for employee-owned devices. Surprisingly, nearly 15 percent of organizations offer free computers for employees’ personal use. Tech benefits ensure that employees have the right equipment to get the work done whether they’re in the office, traveling or working remotely.

#4 Transgender-Inclusive Healthcare Benefits

The International Foundation of Employee Benefits Plans (IFEBP) found nearly 30 percent of employers now offer transgender-inclusive benefits, like coverage of sex-reassignment surgery or subsidies for cosmetic procedures, such as electrolysis, mastectomy and Adam’s apple reduction surgery.

“Employers are increasingly recognizing the importance of LGBT benefits,” says Julie Stich, associate vice president, content, for the IFEBP in Brookfield, Wisconsin. “The growing awareness of LGBT rights has made its way into the workplace, and organizations are adjusting the design of their benefits programs and the language of their diversity policies to be inclusive of LGBT employees and their families.”

#3 Student Loan Debt Repayment Programs

There’s no way to ignore the massive student loan debt crisis in America. Employers have been developing solutions to help employees who are struggling to pay down their share of the more than $1.5 trillion in student loan debt. Some companies are allowing workers to transfer up to five days of paid time off for payments against student loan debt. Other programs offer student loan refinancing or allow employers to match employee 401(k) contributions with student loan repayments.

#2 Mental Health Employee Benefits

Nearly a quarter of U.S. workers have been diagnosed with depression and 40 percent of them take an average of 10 days off from work each year because of their mental illness, according to the American Psychiatric Association (APA). The World Health Organization (WHO) estimates depression and anxiety cost the global economy $1 trillion each year in lost productivity. The good news? WHO also estimates that for every $1 put into scaled up treatment for common mental disorders, there is a return of $4 in improved health and productivity.

Employers can minimize the effects of mental illness in the workplace by identifying work-related risk factors and simplifying access to mental health benefits.

Top 10 Employee Benefits for 2020: Financial Wellness Programs Are #1

Money causes the most stress in the lives of almost 60 percent of employees, according to the latest report by PwC. It was the top choice for life stressor across all generations, well ahead of issues with jobs, relationships, and health. More than 30 percent of employees say their health has been impacted by their financial worries.

When PwC asked respondents what employer benefit they don’t currently have but would like, one in four employees said they want a financial wellness program with an unbiased counselor. Research by Paycor found that financial wellness benefits appeal to all age groups.

Financial wellness programs, like Best Money Moves, give employees personalized tools to help them better manage their money, pay off their debts, build their savings and plan for retirement.

More on Trends in Employee Benefits

Hiring Trends to Watch in 2020

Choosing the Most Important Benefits to Employees in 2020

10 Easy Ways to Improve Your Office Culture

4 Big Employee Benefits Trends for Family Planning

What Benefits Do Employees Want in the New Year?

Top 10 Workplace Etiquette Rules for Communication

Building Office Culture with Diversity and Inclusion

How Bad Is the Student Loan Crisis?

by LizStevens | Mar 5, 2019 | Blog

How bad is the student loan crisis? Student loan assistance is becoming a popular employee benefit for employers who want to help workers reduce financial stress from student loan debt.

Over 70 percent of Millennials say they’ve delayed decisions like buying a home or having children because of their student loan debt, according to a recent survey by Bankrate.

“There’s a huge toll being taken on individuals and the U.S. economy from the growing burden of student loan debt,” said Bankrate’s Senior Economic Analyst Mark Hamrick. “For the huge slice of the American population with debt, it is necessary to juggle competing goals including saving for emergencies and retirement as well as major life decisions.”

Student Loan Debt Regret

Nearly 80 percent of Millennials would have approached their college finances differently in hindsight. More than half of Millennials would have applied for more scholarships than they did. Others would have attended a cheaper university, opted for community college or trade school, or majored in a different field.

“Many families are now striking out to investigate college campuses as they begin studies this fall,” said Hamrick. “For those prospective students and their families, many of who will help them to pay for their secondary education, we’d urge them to investigate all possible options for financial aid including scholarships to limit their borrowing.” He goes on to suggest: “Their options also include attending a lower-cost school such as those in-state as well as more economical trade schools and community colleges.”

Families can help children approaching college make better decisions about student loans now, but what about the Americans splitting the $1.5 trillion in student loan debt the U.S. has already generated who aren’t meeting milestones or saving for retirement?

Employee Student Loan Assistance

Employers are coming up with solutions to help employees pay down student loan debt and get back on track with saving for retirement. Some companies are allowing workers to transfer up to five days of paid time off for payments against student loan debt. Other programs offer student loan refinancing or allow employers to match employee 401(k) contributions with student loan repayments.

Lawmakers are working to expand existing legislation that allows companies to offer up to $5,250 in tax-free tuition reimbursements to include $5,250 in tax-free student debt relief for workers in an attempt to further motivate employers to offer student loan assistance benefits.

Student loan debt assistance is still a new benefits offering, but it’s developing rapidly to meet the need to address the $1.5 trillion issue that’s stressing Americans out and keeping them from financial security.