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Troy, MI – March 24, 2020 — Sara VanWagoner, Vice President of Corporate Growth for Edcor, a national provider of education benefits administration solutions that processed just under $250M in tuition assistance payments and supported more than 2M employees in 2019, expects a longer ramp-up for employers to offer what may be deemed non-traditional employee benefits, such as student loan repayment assistance, during the recovery period following COVID-19.
“With an estimated $1.52 trillion U.S. student debt load, employers want to help their employees pay off their student debt, but the additional expenses that will accompany COVID-19 recovery will force them to make extremely difficult decisions about all of their benefit programs,” VanWagoner said.
Edcor introduced its Freedom student loan assistance program in 2019 and is one of only two full-service education benefit administration companies offering such a program. Other student loan repayment platforms in the marketplace are software programs focused solely on loan repayment, rather than full-service education solutions like Edcor’s that are designed in collaboration with employers and education partners specifically to recruit and retain key personnel.
VanWagoner noted that while implementation of Freedom can take place in as soon as three days, some employers underestimated the time needed to plan for the benefit.
“While some of the monies to pay for programs can be taken from existing under-utilized benefits such as 401(k) plans and other reimbursement benefits, employers with a particularly young employee population–or hard to retain population–may need to budget two years into the future to afford a program. Even if the loan repayment benefit is relatively modest, $1,000 a year per employee can add up. That cost may be amplified with other new COVID-19 recovery costs.”
Still, VanWagoner says student loan repayment programs, along with traditional tuition assistance, are long-term strategic initiatives that also help employers develop a more diverse workforce by creating new opportunities for women and minorities. Earlier this year, Edcor released a white paper, Student Loan Repayment Assistance Raises Diversity and Inclusion, addressing the topic.
Despite the dramatic changes certain to follow in the wake of COVID-19, VanWagoner said the talent shortage, shifting population trends and need for highly specialized, niche skills will help the industry rebound and continue growing.
“There have been multiple bills in the legislature that would make student loan repayment a tax-free benefit to employees, and or provide a tax credit to employers. With all the legislation we are seeing surrounding COVID-19 relief, I wouldn’t be surprised if we see positive movement on this particular legislation as well,” VanWagoner said.
Edcor, a certified woman-owned business, is the benchmark in education benefits administration. For more than 38 years, our customized service and software solutions have allowed clients to use education benefits programs, including tuition assistance and student loan assistance, for employee recruiting, retention and development. Additional information can be found at https://www.edcor.com/.