In this current job market, offering permanent, sustainable employment and even competitive wages isn’t enough, especially for Millennial and Gen Z applicants. In addition, potential employees may see the need for and importance of obtaining credentials to help them reach their career goals but may be experiencing the burden of prior student loan debt. Tuition assistance or student loan repayment is a great way to support your employees while retaining and recruiting new talent.
Benefits of Offering Educational Support
In this ever-competitive hiring market, you may be searching for ways to recruit (and retain) employees. An educational support program is one way to invest in your employees and help them build lifelong skills.
The benefits of offering educational support programs include but aren’t limited to:
- Recruitment tool
- A more educated workforce for your company
- Potentially less turnover and longer retention of well-trained employees
- Opportunities for partnership with educational institutions that can also serve as recruitment paths
- Employees less burdened by student loan debt
- Employers who implement student loan repayment support programs may be eligible to take advantage of the Opportunity Maine Tax Credit
Tuition assistance and student loan repayment can function in a few ways. Some employers offer upfront funds that employees can access to pay for courses, while others offer reimbursement to employees for educational costs employees already paid. When starting and implementing a tuition assistance or student loan repayment benefit, consider:
- Will assistance be provided up front to cover expenses or offered as a reimbursement? Will there be a cap on the dollar amount?
- Are funds available immediately upon employment or must an employee be there a specific amount of time first?
- Are courses limited to specific fields, degrees, or institutions? Will training and certification courses and programs be considered?
- What sort of costs will be covered? Are funds for tuition and fees only or will they include books and travel?
- Who will coordinate payment with the schools or lenders?
- Is the program for employees only or will there be a component for dependents/spouses of employees?
Student Loan Repayment Support
Another way employers can support their employees’ educational pursuits is by offering student loan repayment support. According to Project on Student Debt, Maine has the 10th highest debt among all U.S. states, which means a portion of wages could be going toward student debt payments instead of savings goals. Offering a way to offset monthly student debt payments can be a real difference-maker for employees. Many of the same considerations around timing/planning that exist for tuition assistance programs are true for implementing a student loan assistance initiative, but additional considerations include:
- Will private student debt be considered as part of the program or just federal student loan debt?
- Will payments be made directly to the lender or servicer, or will the employee be responsible for making the payments and providing proof of loan payment?
- Is assistance monthly, to offset monthly loan payments, or a flat, lump sum to reduce total amount owed?
One-Time or Recurring Scholarship Programs
Another option to support employees in their educational pursuits is to offer scholarships. Consider partner organizations with whom you could team up to create a scholarship fund. You may find that employees want to donate to such an initiative too, which means it could grow over time and be available to more people.
Starting an educational assistance program might seem daunting, but it doesn’t have to be. Maybe start with offering a scholarship to gauge what the interest level is and to allow you time to find or build funds for a more robust program. If you wish to dive right into offering a tuition assistance and/or student loan repayment program, consider reaching out to your local college or university as a first step. Leverage sister organizations that may already have a program in place and ask them how they got started. You may also find local businesses, adult education centers, or other organizations that would like to partner to build an educated and well-trained workforce in your community, allowing you to share in the costs of such programming. If you’re thinking about implementing one of these programs, reach out to us to help you get started.
Education About Existing Programs
It is also important for employers to educate employees on existing educational assistance programs, including tax credits such as the Education Opportunity Tax Credit (better known as Opportunity Maine) for education, 529s and other education savings plans, and student loan repayment and refinancing options. FAME can help you educate your employees about these topics and more.