Stu­dent loan pro­gram pays off for Rise In­ter­ac­tive

The firm im­ple­mented the ben­e­fit af­ter em­ploy­ees com­plained debts were stop­ping them from con­tribut­ing to their 401(k)s

Employee Benefit News - - CONTENTS - BY KATHRYN MAYER

The firm im­ple­mented a debt re­lief ben­e­fit af­ter em­ploy­ees said they weren’t con­tribut­ing to their 401(k).

Rise In­ter­ac­tive, a Chicago-based dig­i­tal mar­ket­ing firm, makes it a point to con­sis­tently sur­vey em­ploy­ees about en­gage­ment and get their thoughts on is­sues rang­ing from com­pany cul­ture to em­ployee ben­e­fits. The gen­eral con­sen­sus? They were happy and en­gaged.

But in the last year, em­ploy­ees be­gan to com­plain about the com­pany’s 401(k) plan.

That con­fused Ni­cole Skaluba, the com­pany’s di­rec­tor of em­ployee ser­vices.

“Our 401(k) plan was pretty av­er­age, it was mar­ket com­pet­i­tive, so we asked them more ques­tions about it,” she ex­plained re­cently at EBN’s Ben­e­fit Fo­rum & Expo in Boca Ra­ton, Fla. “We wanted to dig into the rea­sons why they weren’t happy be­cause we re­ally didn’t un­der­stand it. Turns out they were OK with our 401(k), but bummed out they couldn’t con­trib­ute more to it be­cause they were pay­ing off stu­dent loans,” she said.

Rec­og­niz­ing that bur­den­some stu­dent loans had be­come a prob­lem, Rise In­ter­ac­tive looked for a way to help.

That’s why ear­lier this year, the com­pany part­nered with Peanut But­ter, a stu­dent loan ad­min­is­tra­tor founded in 2015 by David Aron­son. Rise de­cided to con­trib­ute $50 a month to­ward em­ploy­ees’ stu­dent loans, and told its 230 work­ers about the new of­fer­ing through a va­ri­ety of ve­hi­cles, in­clud­ing news­let­ters, in-of­fice sig­nage and in re­cruit­ing ma­te­ri­als.

It was an im­me­di­ate hit: On the first day the ben­e­fit was an­nounced, more than 10% of em­ploy­ees signed up.

Em­ployee par­tic­i­pa­tion is now at 24%, but Skaluba ex­pects that num­ber to grow sig­nif­i­cantly, es­pe­cially as new young em­ploy­ees, of­ten with mas­sive amounts of stu­dent debt, join the com­pany. (The av­er­age age of Rise’s em­ploy­ees is 27.)

The stu­dent loan re­pay­ment ben­e­fit has al­ready been a huge re­cruit­ing and re­ten­tion piece for Rise, she said. “Peo­ple are re­ally proud to work for an or­ga­ni­za­tion that’s of­fer­ing this. It’s been a great ben­e­fit for us.”

Com­pa­nies can reap high re­wards — from re­tain­ing and at­tract­ing tal­ent to help­ing to elim­i­nate fi­nan­cial prob­lems that tend to af­fect em­ployee pro­duc­tiv­ity — by of­fer­ing a stu­dent-loan-re­pay­ment pro­gram, Aron­son said dur­ing the ses­sion with Skaluba.

“It re­ally helps them be­come an em­ployer of choice. The stu­dent loan prob­lem is felt by so many peo­ple,” he said, not­ing that 26% of the U.S. work­force has stu­dent debt. But it’s a grow­ing prob­lem: 71% of the class of 2017 grad­u­ated with debt.

“Em­ploy­ers are choos­ing to add this be­cause it’s mean­ing­ful to their work­force,” he said.

Aron­son said that Rise’s ex­pe­ri­ence show­cases lessons for other com­pa­nies in de­vel­op­ing an ef­fec­tive plan de­sign, such as:

Start low and grow. Aron­son said that though many em­ploy­ers tar­get a $100 monthly con­tri­bu­tion, $50 a month is a good start­ing point. It min­i­mizes en­roll­ment risk, and then em­ploy­ers can see how it works out. They can in­crease their con­tri­bu­tion later if they de­cide to.

Keep it sim­ple. “Rise is mak­ing all em­ploy­ees el­i­gi­ble for the ben­e­fit, mak­ing it avail­able day one, and there are no tiers or spe­cial re­quire­ments re­lated to their plan,” Aron­son said. “Tac­ti­cally what that means is the pro­gram is very easy to com­mu­ni­cate, and it’s easy to un­der­stand for the em­ployee.”

Rec­og­nize that it’s about peo­ple. Ul­ti­mately, stu­dent loan re­pay­ment is a ben­e­fit that em­ploy­ees want and need.

And while it ben­e­fits the em­ployee, it also ben­e­fits the com­pany. “While a stu­dent loan pro­gram will not be the sole rea­son some­where like Rise is a great place to work, it’s one rea­son it is,” Aron­son said.

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