Payment due! As student loan payments resume, employers can take these key actions

After more than three years on pause, federal student loan payments are scheduled to resume in October, which is why employers should be prepared to provide resources to help employees grapple with the financial stress.

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After more than three years on pause, federal student loan payments are scheduled to resume in October. For the 43 million Americans holding this debt, the resumption of a monthly payment averaging $503 might come as a shock. Household budgets will feel squeezed, discretionary cash stretched thinner and financial stress becoming even more palpable. Financial stress and trauma are already pressing issues for nearly three-quarters of American workers.

Employees will ask for help – what can employers do/?

Employees will likely seek help in the months ahead due to the re-emergence of student debt servicing. Employers should be prepared to provide resources to help employees grapple with financial stress and the new pressures the resumption of federal student loans may trigger. To prepare, here are three key actions employers can take right now:

  1. Inventory all available resources first, particularly if they are already included in the broader benefit plan. Typically, benefits found in employee plans have some component for financial well-being that can help with a number of issues such as managing student debt. For example:  (1) The retirement savings plan may offer budgeting, saving tips and planning resources; (2) the life and disability plan may have wealth accumulation and asset protection information and tools; and (3) Employee Assistance Program may offer debt management resources and counseling assistance.
  2. Understand how these various benefits can help, how they may interact across platforms and what service gaps and resources still exist. From there, you can decide which resources to leverage and what benefits to add.
  3. Consider tuition assistance programs and student loan assistance programs. This decision is more costly and requires a detailed understanding before introducing either or both.

Tuition assistance programs

Tuition assistance is a long-standing benefit that employers offer to help employees pay for ongoing education. Similar to most benefits, the scope of the support provided can be customized by an employer and could include the following:

Student loan assistance programs

Student loan assistance programs help employees manage debt accumulated from past education expenses. These programs can provide support and guidance for employees, helping them navigate their options and reduce their debt as much as possible. Some common offerings include the following:

The employer benefits

To evaluate the positives that stem from student debt-related benefits, consider these potential business outcomes:

Other benefits supporting employee financial health

Financial stress affects all employees.  Student debt is just one of many stressors. A diverse workforce comprised of people with different incomes, obligations and life stages will require a variety of benefits in a personalized way. In addition to student loan assistance programs, other impactful financial well-being strategies and benefits to consider are:

Related: Student loan debt: More employers offering repayment benefits

When the federal student loan repayment process resumes in October, the need for these programs will be greatly magnified and instigate many employee questions and requests. Employers should start preparing now so they can best support their employees and ultimately enhance their workplace offerings.

Ted Kane is a Partner and employee benefits specialist at Brown & Brown.