- Unum, a Tennessee-based insurance company, is allowing its US employees to exchange unused vacation days for help with student loan payments.
- Unum employees are allotted at least 28 paid vacation days a year; they can forfeit up to five days and receive up to $250 a month cash toward their student loans.
- An increasing number of companies big and small offer student loan repayment benefits to employees, and research shows employee financial stability is linked to overall well-being and work performance.
Some college graduates are so saddled with student loan debt, they may be willing to give up vacation time to pay it back.
Unum, a Fortune 500 insurance company based in Tennessee, recently announced its new student debt relief program, which offers employees a perhaps enticing exchange: Forfeit up to five unused vacation days and receive up to $250 a month to put toward student loan payments.
In their first year at the company, Unum employees receive 28 days off, including holidays and personal days. The average US employee is given 15 days, reported Rebecca Greenfield for Bloomberg.
The average Unum employee has $32,000 in student debt and payments of $350 a month, Greenfield reported. With the new program, which is operated by Fidelity Investments, each forfeited vacation day is worth that employee’s hourly rate, on a pre-tax basis, up to $250 for an 8-hour workday.
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For an employee earning $60,000 a year, that would translate to about $230 for a standard, 8-hour workday, for a maximum of $1,150 a year. Employees can start trading in their unused vacation days for 2019 beginning in January 2020.
Two years ago, the company launched a tool to gather anonymized employee data on student loan debt, Carl Gagnon, associate vice president of Global Financial Wellbeing for Unum, told Business Insider. "From this, we estimate the about 30% of our US employees carry student loan debt — either for their own education or their children’s," Gagnon said.
"Anything companies can do to help their employees with the strain of student debt is great news," Kevin Walker, the vice president of education loans at Student Loan Hero by LendingTree, told Business Insider about Unum’s initiative.
"More than 40 million Americans currently owe approximately $1.5 trillion in student debt. It makes sense that employers recognize that their employees’ investment in education has made them better equipped to be productive contributors on the job," said Walker.
Research shows employee financial stability is linked to overall well-being and work performance. Workers also prefer companies that offer help repaying student loans, according to a 2017 study by Oliver Wyman that surveyed over 3,000 households with a bachelor’s degree or more, about one-third of which had outstanding student debt.
The research found 45% of employees say student loan repayment is the most desirable benefit, placing it above retirement contributions and health insurance. When it comes to choosing one job over another, 90% of employees said a student loan contribution benefit would positively impact their decision to accept an offer.
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Source: Business Insider