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?
