The Hartford is rolling out a new student loan repayment benefit for its employees, making it the latest employer to join the ranks of those adding the popular perk to entice and help workers.
The Connecticut-based insurance company says nearly 17,000 U.S.-based employees will be eligible to receive a lifetime total of $10,000 toward their student loan debt starting next year. The Hartford will contribute money directly to loan providers each month.
The repayment program, through student loan benefit provider Gradifi, will go into effect in 2020. It will add onto the student loan counseling and refinancing benefit the company added with Gradifi in July.
The soaring cost of student debt, and the stress it is causing employees, is the company’s catalyst for rolling out the benefit, says Karen Howard, the Hartford’s assistant vice president of total benefits.
“We realize that student debt causes a great deal of stress to our employees, and we created this program to provide them with the financial flexibility to focus on their life and careers,” she says, adding that employee feedback so far has been “very positive.”
“We want to help employees be prepared for their financial future,” she adds. “It can be hard to think about the future and other savings opportunities like retirement when someone is worried about their student debt.”
National student loan debt currently stands at $1.5 trillion, according to the Federal Reserve, and the average person leaves school more than $30,000 in arrears.
The Hartford is the latest in a string of employers setting their sights on helping employees face an exorbitant amount of school debt. Employers including Aetna, Sotheby’s, Estée Lauder and Staples offer contributions to workers’ principal debt amounts; others, including Fiat Chrysler, provide a student loan refinancing benefit, which allows employees to replace existing loans with a new loan at a lower interest rate.
Montefiore St. Luke’s Cornwall, a not-for-profit community hospital with campuses in Newburgh and Cornwall, N.Y., announced this month its own unique student loan benefit, with provider Tuition.io, that allows employees to transfer their unused paid time off to the repayment of their student debt. Eligible MSLC employees can convert 30 to 75 hours of unused PTO into payment against student debt, which will be distributed semi-annually, with a maximum $5,000 annual contribution.
Overall, 8% of employers now offer a student debt benefit, up from 4% last year, according to the Society for Human Resource Management. Industry insiders predict that number will grow.
“As the percentage of the U.S. workforce with student loan debt continues to expand, a growing number of employers are realizing they must offer their employees student loan repayment benefits to attract and retain the talent they require to be successful,” says Tuition.io CEO Scott Thompson.