Written by Steven Miller, CEBS, with insights provided by Bobbi Kloss, BAN Director of Human Capital Management Services.
Employers seek creative ways to ease student loan burdens
Employers continue to roll out new ways to provide workers with student debt relief. Insurance firm Unum, for instance, announced in January that it will let employees exchange accrued but unused paid time off (PTO) for payments against their student loans.
“This innovative solution gives U.S. employees a choice to use their benefits in ways that work best for them,” stated Carl Gagnon, Unum’s assistant vice president of global financial well-being and retirement programs. The option will be available to any of Unum’s U.S. employees who have student debt, including parents who have taken out loans for their children.
Employers are “finding creative solutions for people to tackle this challenging issue,” said Ashwini Srikantiah, vice president for student debt programs at Fidelity Investments, which is managing Unum’s student debt relief program.
Starting their first year at Unum, full-time employees receive 28 days of PTO, including holidays and personal days, with additional PTO available over time, Gagnon said. Each year, employees can carry over up to five days (40 hours) of unused paid time. Starting in January 2020, participants in the student debt relief program will be able to transfer up to 40 hours of carryover PTO into a payment against student debt.
“Instead of deferring those [accrued PTO] days to take an extra-long vacation in the future, Unum’s benefit will provide employees with an extra payment toward their debt, which is at the forefront” of their financial concerns, said Brian Carlson, vice president for wealth management at benefits broker GCG Financial, an Alera Company, in Deerfield, Ill.
Addressing a Need
“We’re seeing increased demand for student loan repayment benefits both from employers that want to offer it and from employees electing it as a voluntary benefit,” said Jeff Oldham, senior vice president, BenefitsPlace Distribution, at Benefitfocus, a cloud-based benefits management platform firm based in Charleston, S.C. “The solutions we’ve commonly seen from employers include making direct contributions toward the loan amount or connecting employees to lenders offering lower-than-average interest rates to refinance or bundle their loans. The utilization of unused PTO to fund student debt demonstrates a creative way to tackle the issue.”
Bobbi Kloss, director of human capital management services for the Benefit Advisors Network, a Cleveland-based consortium of health and welfare benefit brokers, praised [Read More]