Boost Retention with Student Loan Payments

Attracting and retaining talented millennial employees is a challenge for employers in every industry. With many millennials managing the burden of student loan payments, repaying student loans has become one of their biggest concerns. Student loan repayments may delay major life decisions and significantly impact overall financial health. Research shows millennials are open to switching jobs in pursuit of career growth – 60% say they would consider a new opportunity, and 21% changed jobs within the past year. Half expect to still be at their current company in a year. Employee turnover can be very costly. Studies estimate that replacing an employee typically costs half to twice that employee’s annual salary. Offering a student loan repayment benefit can help reduce these costs by supporting employees’ financial wellness and giving them a compelling reason to stay.

Addressing a critical financial concern

With the majority of millennials carrying student loan debt, this type of benefit directly addresses one of their biggest stressors. Helping employees manage their student loan repayments can ease financial pressure, improve focus and productivity at work, and increase overall job satisfaction. It also communicates that employers are invested in the long-term well-being of their teams, not only professionally, but financially and personally.

Incorporating this kind of support into a benefits package shows that the organization understands its employees’ real-life challenges. A thoughtful and relevant approach to financial wellness can make a lasting impression on millennial workers who are often seeking more than just a paycheck. They want purpose, support, and benefits that match the realities of their lives.

In today’s competitive job market, retaining top talent is crucial. Student loan debt repayment assistance is now an essential employee benefit. It’s becoming an essential part of a modern, employee-centered benefits strategy that supports engagement and long-term loyalty.

Connecting employees to their work

Research supports the idea that millennials often leave jobs when they feel unsupported or disconnected from their growth and development. A lack of coaching, training, or clear advancement opportunities can push them to explore other options. That’s why employers need to think holistically when it comes to engagement.

Millennials are drawn to organizations that provide customizable benefits packages – an approach that appeals across all generations but is especially important to younger employees navigating early financial milestones. Personalized benefits like student loan repayment assistance are among the most attractive. In fact, over 86% of employees say they would stay with a company for five years if it helped pay their student loans, making this benefit a powerful tool for retention and building a more stable, experienced workforce.

Easing financial burdens

Findings show that 65% of students graduating from four-year colleges carry student loan debt. Evidence also supports that than 43 million American adults owe an estimated $1.7 trillion. For many employees, this debt isn’t just a financial burden – it’s a daily distraction. Employees with student loans often spend time at work worrying about their finances, which can lower engagement and reduce performance. Worse yet, many will spend 10 to 30 years repaying their loans.

Employers can offer meaningful support by providing student loan payment benefits that help shorten the repayment timeline and reduce the overall cost of the debt. These benefits ease financial stress, allowing employees to stay focused and feel more secure in their roles.

A smarter way to offer support

One effective solution is Employee Choice, a student loan repayment benefit offered exclusively by BenefitEd and Ameritas. This program gives employers the flexibility to use funds already allocated for 401(k) matching contributions. Instead of letting those contributions go unused, employees can choose to apply them toward student loan repayment.

Participants can direct the full match toward paying off their loans or split the benefit, allocating part of the match to loan repayment and the rest toward their retirement savings. This dual-purpose approach supports employees’ current financial needs while also encouraging long-term planning.

May employees may be missing out on valuable 401(k) matching contributions each year. Employee Choice allows employers to put that money to work, helping team members tackle their debt without requiring any additional budget or resources. It’s a simple, cost-effective way to provide meaningful value.

Supporting different needs at every life stage

Millennials have diverse life goals and financial priorities, and student loan debt often stands in the way of reaching them. The weight of this debt can cause employees to postpone important milestones, such as starting a business, enrolling in advanced training, earning a graduate degree, or purchasing a car or home. In some cases, it can even delay major personal decisions like getting married or starting a family.

When employers provide a student loan debt payment benefit, they offer more than just financial relief; they give employees room to dream, plan, and grow. It shows that the organization understands the full scope of what today’s workforce is facing and is willing to meet them where they are.

A strategic investment in employee loyalty

In a competitive labor market, benefits that reflect real-life concerns can be a deciding factor for top talent. Offering student loan repayment assistance sends a strong message: the employer cares about its people and is invested in their success.

This kind of support fosters deeper loyalty, increases employee engagement, and enhances workplace culture. It also builds goodwill and strengthens an organization’s reputation as a forward-thinking, employee-centered brand. Helping employees reduce their debt isn’t just generous; it’s a smart business strategy that delivers measurable value for both sides.

Sources and References:
Indeed
HRMorning
HROne
Nasdaq
Association of Public & Land-Grant Universities
Bankrate
BenefitEd