Student loan repayment assistance: A benefit that employers and TPAs should take seriously
Benefits administrators have an opportunity to fill a need that is predicted to soar in the coming years.
October 14, 2020
By Bo Armstrong
Across the country, companies of all sizes seek to recruit and retain top talent by offering more than salary – employees want substantial benefits packages. One highly desirable benefit that’s gaining more attention is student loan repayment assistance. In this up-and-coming, underserved market, third-party benefits administrators have an opportunity to fill a need that is predicted to soar in the coming years.
From 2008 to 2018, tuition rates at public colleges and universities increased by an average of 37%. In some states, tuition costs have doubled over that same time period (Louisiana 106.9%; Arizona 92.4%). Part of this is due to demand, but rising costs can also be attributed to increased overhead and cutbacks in state funding for higher education.
Skyrocketing college tuition costs have been met with an equally voracious student loan market. In 2018, 66% of students graduating from public colleges; 75% of students graduating from private non-profit colleges; and 88% of for-profit college graduates held student loan debt, averaging at least $25,000.
Such a large student loan debt burden has a detrimental effect on the economy, as people must prioritize how they will spend their money. It affects their ability to buy a home or a car, or pay for health insurance. With such a widespread impact, employers and third-party administrators can step in to help.
Student loan reimbursement assistance (SLRA) benefits
Offering a student loan repayment assistance plan as part of an employer’s benefit package could be an exceptional recruiting and retention tool. But historically, there has been no way for an employer to provide an SLRA on a nontaxable basis to the employee. As a result, despite the well-documented negative impact of escalating student loan debt, SLRAs have remained a relatively unattractive and underutilized benefit.
Read the full article, Student loan repayment assistance: A benefit that employers and TPAs should take seriously, on BenefitsPRO.
Bo Armstrong
Chief Product and Marketing Officer, DataPath, Inc.
Bo has over 20 years of marketing leadership experience. His responsibilities include branding, communications, social media, product marketing, PR and promotions. He focuses on identifying emerging market trends within the benefits industry and advocating for customers and their needs. Bo is also a national conference speaker and author of numerous whitepapers and articles on the healthcare benefits industry.