These days, more and more employees want their employers to provide financial wellness benefits that go beyond retirement, life insurance, and disability insurance. In fact, according to a survey on financial wellness benefits by SHRM and Morgan Stanley, education benefits are the third-most requested financial wellness benefit among working adults.
For some employers, providing education benefits means contributing to employees’ loan payments. This is a great benefit, but as a nonprofit employer, you’re in a unique position to provide a particularly meaningful benefit to your employees with federal student loans. To put it simply: you can help your employees get on the road to a loan-free future through the Public Service Loan Forgiveness (PSLF) program.
If you hadn’t previously considered helping your employees apply for PSLF, here’s why now is the time to do it.
An Underused Program with Lots of Appeal
For many borrowers, paying off federal loans may seem like an unachievable goal. Stress around debt can have a negative effect on borrowers’ mental health—and this has a ripple effect in their personal and professional lives.
PSLF can help borrowers realize a future without that debt. Through the program, a borrower’s remaining federal loan balance is forgiven after they’ve made 120 qualifying monthly payments while working full-time for a qualifying nonprofit employer. We’ve helped many borrowers get forgiveness at Summer, and we’ve seen firsthand how transformational reaching this milestone has been.
The good news is that the tax-exempt status of your organization means that every full-time member, regardless of role, can begin the process of signing up for PSLF. Previously, that was only half the battle: employees also needed to have a specific type of loan in order to qualify for the program. However, as part of the Limited Waiver announced by the Department of Education in October, a variety of loans are now temporarily eligible for PSLF; so all of your employees with federal loans can begin their PSLF journey.
While PSLF is a wonderful program in theory, its execution has been plagued by poor promotion, mistakes, and misinformation. This is where you, as an employer, can make a positive difference in your employees’ lives by adding a student loan assistance program to your suite of financial benefits.
- Inform employees about PSLF. PSLF is notorious for being poorly publicized, so while millions of borrowers are eligible, many aren’t applying for the program. Some of your employees may be in this position, so bringing PSLF to their attention and providing resources about the program will be a game changer for their finances. This is especially time-sensitive and critical for the Limited Waiver because there is action some borrowers need to take in order to take advantage of it. At Summer, we’re constantly staying on top of policy developments in the student loan space, so we can help your employees understand when things are changing and what they need to do (if anything).
- Support employees as they apply for PSLF. To apply for PSLF, borrowers need to submit a few forms, including employment certification. As our Head of Borrower Success Bridget Haile noted in a recent Q&A, these forms need to be filled out in a particular way to avoid rejection. Implementing a process and ensuring that your HR team knows which mistakes to avoid will make this as streamlined and pain-free for everyone. Summer also provides borrowers with the ability to certify their employment online, which is convenient for borrowers and employers alike.
- Help employees challenge rejected payments or misinformation from loan servicer. This is a repeated point of frustration for borrowers who are working toward forgiveness. Loan servicers will incorrectly tell borrowers that they have additional payments left or that they’re ineligible for the program. Rather than leaving your employees to deal with these issues on their own, Summer can support your employees as they navigate these unfortunately common headaches.
Lastly, if you offer this benefit, promote it! Per the SHRM and Morgan Stanley financial wellness benefits survey, only 11% of HR professionals at organizations with education benefits saw an uptick in employees using those benefits since the onset of the pandemic. PSLF is a benefit that is open to every full-time employee at your organization, and it’s important that they know this.
A Recipe for Retention
Another reason to consider adding a student loan assistance program to your benefits is retention. The Great Resignation, which has led to record-breaking departures, has left many employers scrambling. Various reasons have been provided for this exodus: better salaries and benefits elsewhere, contagious nature of quitting, and burnout (especially among healthcare workers), to name a few.
This has been a wakeup call for employers as they re-evaluate their relationships to their employees. Offering PSLF support to employees shows that you are serious about investing in their well-being. Receiving forgiveness is truly life-changing for borrowers: it improves credit scores, frees up cash flow, and allows them to put money towards other financial goals like buying a home. Given that nearly three-quarters of employees are willing to leave their current employer for one that offers better financial benefits, improving your employees’ financial well-being will make your workplace more attractive to them.
An Easy Way to Meet Your Team’s Needs
Financial wellness has likely never been more important to employees and, by extension, employers, than it is now. The COVID-19 pandemic has increased financial stress for many workers, with survey after survey detailing how many working adults are worried about their finances. Meanwhile, more employees are leaving their jobs—which economists are quick to attribute to the allure of better pay and benefits at new organizations.
By helping your employees get on the road to forgiveness by raising awareness for PSLF and providing resources to help them get started, you can reduce their financial stress and increase retention. Schedule an intro call with a Summer product specialist to learn more about how offering a digital PSLF solution can help you make a positive impact on your employees’ financial and mental well-being.