Risk & Business Magazine Marcotte The Magazine - Winter 2018 | Page 8

STUDENT LOAN ASSISTANCE
Student Loan Assistance: A Powerful New Benefit
I
f you’re trying to differentiate yourself
from competitors in the struggle to
attract younger workers, there is an
up-and-coming trend you should
know about. Savvy employers are
realizing that help with the crushing
weight of student loan repayments is much
more valuable to younger workers than
retirement plan matching contributions.
Once employers are universally able to add
student loan repayment assistance to their
benefits portfolio, this new trend in benefits
is expected to further accelerate.
One question still to be answered, however,
is whether the ability for companies to
contribute tax-free matching funds towards
student loan debt repayment is actually
legal. Measures before Congress, however,
would allow employers to provide student
loan repayment assistance as a tax-free
benefit to employees. In the meantime,
these allowances have been made on a
case-by-case basis, most notably for the
pharmaceutical giant, Abbott Labs. In
a July 2018 news release, Abbott stated
the “benefit responds to recent financial
challenges facing young employees . . . and
adds to the strong appeal of joining the
Abbott family.” Prudential Retirement also
began offering this benefit to its employees,
issuing a statement that “Our research tells
us many workers will choose to pay down
debt rather than save for retirement.”
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The research supports these companies’
claims. Statistics from studentloanhero.
com assert that the average 2017 college
graduate held $39,400 in student loan
debt—a significant increase over the prior
year. In total, 44.2 million Americans owe
a staggering $1.48 trillion in student loan
debt, with monthly payments averaging
more than $300. The delinquency rate
is a hefty 11.2 percent, suggesting that
these borrowers are in desperate need of
assistance. It is no surprise, given these
statistics, that many of these employees
are living paycheck to paycheck. Saving for
retirement during early adulthood is just
not a practical reality for most of them.
The great thing about offering this type
of debt assistance to employees is that
it more than pays for itself in increased
job satisfaction, engagement, and
productivity. With higher retention comes
lower recruiting and training costs—a
tremendous motivator for any employer. If
employers can couple financial incentives
in the form of student loan assistance
with training forums such as money
management, budget development, and
credit building, they can help employees
form strong financial habits that will serve
them throughout their lives.
At Marcotte, part of our role is to assist
clients in developing a benefits package
that can act as a strong recruitment tool
while being as cost effective as possible.
We keep abreast of trends in benefits
package management as well as upcoming
legislation that could affect each client’s
financial position. We are happy to help
review options for those considering
adding student loan reimbursement as part
of their overall benefits package.
BY: TAMMY VANDERWILT CEBS
ACCOUNT EXECUTIVE
EMPLOYEE BENEFITS
Tammy Vanderwilt leads Marcotte’s Employee
Benefits Sales Team as they deliver innovative
solutions to employers across the Midwest. She
leverages her accounting background diving
into the details, analyzing life, disability and
group health contracts and uncovering plan
limitations and advantages. Tammy guides HR
and C-Suite professionals through the entire
employee benefit process from marketplace
analysis to specific benefit design, employee
communication and on-going service. She
earned a Bachelor’s Degree in accounting from
Wayne State University and holds the Certified
Employee Benefit Specialist (CEBS) designation.