Plus, which industry sector is leading the way to offer tuition assistance and student loan repayment programs?
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Troy, MI – September 16, 2019 —Edcor, a national provider of education benefits administration solutions that processed more than $238M in tuition assistance payments and supported more than 1.7M employees in 2018, has a 38-year history of working with employers to establish employee tuition assistance programs and, more recently, student loan assistance programs. Edcor CEO and company owner Adrienne Way says that education benefits offered through employers tell an interesting story of the workforce and put some historical perspective on workplace trends.
“Looking back ten years to the Great Recession, it’s interesting to note that the majority of our clients did not eliminate their tuition assistance programs, they just stopped talking about them,” Way said. “Over the last 10 years, tuition assistance programs have grown to include certifications and even CEUs. Today education benefits are expanding to include a student loan assistance benefit.”
One industry where the demand has remained steady – and is leading the way – is healthcare.
“Our largest customer base is Fortune 1000 companies and large healthcare systems,” Way said. “The demand for college-degreed healthcare professionals, especially nurses, is fierce, and employers need to offer top benefits, including tuition assistance, to remain competitive.”
Way adds that health systems have also been the first to come on board with Edcor’s new Freedom Student Loan Assistance Program, designed to help employers administer employee repayment programs for their employees’ student debt. Hospitals and healthcare systems frequently target nurses who have earned a bachelor’s degree in the past five years, a demographic that tends to have high rates of student debt. Freedom was introduced in response to employers’ need to mitigate the impact of student debt in the workplace and offer a creative new benefit in a tight labor market.
Altogether, there are a reported 44.2 million people with outstanding student loans across the U.S., adding up to a staggering 1.52 trillion dollars. The burden of this debt often finds its way into the workplace, where employees may need to work a second job, take more sick days, or in some cases, apply for medical leave due to physical or mental health concerns, not to mention delaying major life decisions like home purchases, marriage, and starting a family, while also struggling to purchase a car, contribute to 401(k) benefits or concentrate on career goals. Student debt also adversely impacts women and minorities because both groups are more likely to take out college loans yet make less money throughout their lifetime.
Employer contributions for student loan assistance generally range from $50 to $100 per month, but the savings in student debt adds up for the employee.
“Only 8% of employers are currently offering student loan assistance. Employers are able to start these programs by using monies from underutilized benefits like a 401K to provide the funding. Offering this benefit is giving employees a sense of loyalty to their employer; it is a win- win for employees and employers,” Way said.
Employer-sponsored tuition assistance programs and student loan repayment programs are not ERISA benefits, so there are few laws defining their use. Currently, student loan assistance is a taxable benefit to employees, but there is lobbying to allow student loan repayment dollars to be included under Section 127 of the federal tax code, allowing employers to give their employees education assistance dollars up to $5,250 per year tax-free.
“Employer sponsored tuition assistance and other education benefit programs were designed to help employees advance in their careers and ultimately make a greater impact on their employer’s organization,” Way said. “It was all very positive. Today, employers are helping their employees dig out from student debt to help relieve a burden that trickles over into the workplace. It’s still a business decision – but a decidedly different one than in years past.”
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/.