How Much Do Employees Really Want Student Loan Repayment?
Employees aren't going to shun free money, but some employer benefits are more coveted than others. How does student debt repayment, the perk of the moment, rank? Not all that high, finds a new survey from Student Loan Hero.
Last fall, a survey found that an overwhelming percentage of young workers want to work for a company that offers some help paying back their student loans. But when compared to health insurance, 401(k) matching, and paid vacation, the student debt benefit doesn't win out in importance for employees. "This one was pretty black-and-white," said Andrew Josuweit, Student Loan Hero's chief executive officer.
Health insurance coverage still trumps all. Of 1,763 survey respondents with student debt, almost 80 percent said they would prefer a health-care plan over student loan assistance. "That is like Maslow's hierarchy of needs," added Josuweit. "They can't repo your diploma."
Historically, employer-sponsored health insurance has been the most coveted benefit among workers. Despite predictions of its demise following the passage of the Affordable Care Act, employers continue to see it as an important recruitment and retention tool. Respondents were roughly split when it came to picking money for loans vs. the perks of a paid vacation and a 401(k). "It wasn't a slam dunk in any direction," said Josuweit.
Most likely, employees won't have to choose between student debt repayment and more traditional benefits. Most of the companies that have started paying off employee student debts also offer health insurance coverage, some sort of 401(k) matching, and paid time off. For example, PricewaterhouseCoopers, one of the higher-profile companies to offer student loan assistance, gets high rankings on Glassdoor for its benefits package, which includes 401(k) matching up to 6 percent of an employees's salary, 15 paid days of vacation, and health coverage. Student loan pay-down is just an arrow in its recruitment quiver.
The Student Loan Hero study suggests that the benefit is something recruits consider when weighing jobs. Almost 40 percent of respondents said that it is either "extremely" or "very" important that a job offer includes student loan repayment assistance as a benefit. An additional 23.5 percent considered it "moderately important." Younger workers aged 18 to 24—who tend to have more debt and less money to pay it—coveted the benefit more than any other demographic. "The younger you are, the more aggressively you're trying to get out of debt and land on your feet," said Josuweit.