There’s no doubt that most working professionals nowadays carry the burden of paying off their student loans. This debt halts the millennials from achieving their life goals like availing mortgage property or starting a family.
Fortunately, this giant insurance company offers this incredible benefit to their employees to help millennials cope up with their financial obligations. Let’s find out what it is.
The Astonishing Benefit
Unum, a giant insurance company, situated in Tennessee, announced a new benefit that will surely help ease the financial burdens of their employees.
The management recently unveiled the student debt relief program. It aims to give employees the option to avail their vacation days or forfeit it (up to five days) and convert it to cash.
The money they accumulated from unused vacation leaves will then be forwarded to pay their student loans. Meanwhile, Fidelity Investments will handle the programs’ implementation and operations to ensure Usum’s employees pay off their student loans without draining their savings and investments.
Most Unum employees can avail a total of 28 days off, including their paid leaves and holidays. Suffice to say their employees receive more holidays compared to an average US employee, who is only entitled to 15 days according to Bloomberg.
According to the company, most of their employees have $32,000 student debts. It requires them to allocate approximately $350/month from their monthly salary to pay off their loans. If the program gets implemented, Unum claims each unused vacation day will be converted into an employee’s pre-tax hourly rate.
For example, if an employee earns around $60,000 per year, you can receive around $230 if you convert one unused vacation day, or accumulate approximately $1,150 per year.
Unum believes this hefty amount can help their employees in settling their debts easier and sooner. What’s more? Their employees can start trading their unused vacation days this year and claim their converted cash as early as January 2020.
The Warm Feedback
Two years ago, Unum launched a tool to collect anonymized employee data to determine their average student loan debts and how it burdened them with paying it off.
According to associate vice president Carl Gagnon, they estimated around 30% of their employees have student loan debt. It stems either from funding their education or supporting their children’s.
Meanwhile, the vice president of Student Loan Hero, Kevin Walker, commended Unum for taking the initiative to help their employees in paying off their student debts.
According to him, companies should take the extra mile to take care of their employees in return for their hard work. Walker believes Unum recognizes the student loans their employees invested in their education helped them become productive in their work.
The Ripple Effect
Aside from Unum, Walker says many big and small businesses including IBM and Peloton, are now offering student debt repayment benefits to their employees to help them ease their financial burdens. According to their research, Walker says financial stability improves an employee’s well-being as well as their work performance.
A separate 2017 study conducted by Oliver Wyman also shows most workers prefer to stick to a company that offers repayment student debt programs. Wyman surveyed more than 3,000 employees who hold a bachelor or master’s degree. Around 30% of these workers also owe astounding student loans.
The research also shows 45% of young working professionals say they prefer to stay or apply for a company who offers student loan repayment as one of its main benefits, aside from health insurance and building retirement funds.