As the cost of college education continues to climb, some employers are implementing new benefits to better attract millennials, some of whom are saddled with student debt.
Beginning next year, professional services firm PricewaterhouseCoopers is pushing a new benefit it hopes will set the company apart. Employees will be eligible to receive $1,200 a year for up to six years, paid directly to the employee’s student loan, to help pay off college debts.
The PwC program is being offered to all employees at the associate and senior associate level, particularly those coming right out of college, because those are some of the employees with the most debt, says Beth Parker, public relations director at PwC.
She notes that the benefit is part of the company’s overall package and equates it to paternity and maternity leave. “Anybody qualifies,” she adds, “and they don’t need to give any money back.”
“Many companies are seeking ways to differentiate themselves to attract and keep the key talent they need to serve their customers well,” says Ray Baumruk, a partner in employee research and insights at Aon Hewitt. “Providing something unique, such as assistance with college debt repayment, which likely appeals to an important segment of employees, like millennials recently graduating college or those early in their careers, creates the opportunity for competitive advantage in recruiting.”
College assistance programs can be a big tipping point in a growing competitive market to attract the best and brightest talent.
“A current employee receiving this benefit may think more carefully before considering opportunities with other employers who do not offer a similar benefit,” Baumruk adds. This type of benefit aligns with a growing trend among employers to provide programs that support broad financial well-being, he says, and “going beyond the traditional retirement benefits that have been around for decades and emphasizing ways to help their employees truly secure a confident financial future.”
The average cost of tuition and fees for the 2014-2015 school year was $31,231 at private colleges, $9,139 for state residents at public colleges and $22,958 for out-of-state residents attending public universities, according to the College Board.
But college perks have been around for ages on different levels, from tuition assistance and reimbursements programs like PwC’s to other recent game-changing moves like full tuition benefits from coffee giant Starbucks.
And employers will have to make strategic moves to really pick the right program for employees.
“In terms of the relative attractiveness of different benefits such as college debt-repayment versus free tuition or other tuition reimbursement programs, it probably depends on the individual and whether they expect to seek further education or not,” Baumruk says. “For employers, the key will always be to really listen to the needs and concerns of current and prospective employees. Employers need to learn and understand what is most important to their employees, and then use that information to make decisions on how to best use their resources to meet those needs in unique and valuable ways.”
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