National insurance brokerage firm Crystal & Company has added a $10,000 student loan repayment contribution to its benefits package as a financial wellness tool and attraction and retention incentive.
The monthly contribution starts at $100 a month and increases by $25 each subsequent year, which will help employees pay down the principal on their student loans and decrease the amount of interest they have to pay over the loan’s lifetime. Employees who personally took classes and have student loans in their name need to stay at the company for five years and five months to receive the full $10,000 benefit.
“The people who stay longer are going to have larger amounts paid faster because there’s an escalation there,” says Michael Grant, executive managing director of employee benefits at Crystal & Company.
The company expects 40 to 50 of its 450 employees — roughly 10% — to enroll with Gradifi, the student loan repayment platform used by companies like PwC and Penguin Random House. Grant says the company expects that number to double in the coming years.
“If you haven’t spoken to your broker about it, shame on your broker for not telling you about it,” he says. “This is a hot, up-and-coming benefit.”
Likewise, benefit experts believe the number of companies offering student loan repayment contribution benefits will reach upward of 8% by the end of 2018.
San Francisco-based bank First Republic acquired the platform in December 2016; that backing, along with Crystal & Company’s relationship with the bank, led the company to use Gradifi over competitors like Tuition.io.
Grant says Crystal & Company was also able to negotiate a “very reasonable” administrative fee, although he declined to comment on the exact cost. The fee structure, however, is per employee per month.
He also notes that the company sees this benefit truly as a perk for not only millennials but also older workers who are going back to school to stay current in a digital-first workplace. The company says it hopes the benefit is also able to help people manage their debt repayments better.
“By lowering one form of debt, we ultimately help employees with another type,” Grant says. “We’re helping them deter from less favorable lines of credit that can damage their long-term financial credit.”
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