By Adrien Borger
After a three-year pause, student loan repayments started up again in October 2023. Which means that over 43 million Americans will resume making payments on their education debt. It is likely that some of your employees are part of this population and may start to experience additional financial stress as they begin making these payments. With this big change, this additional financial difficulty has the potential to not only impact your employees’ financial and mental health at home, but also their productivity and disposition at the office — and maybe even your bottom line.
A 2022 survey by PricewaterhouseCoopers (PwC) found that when employees are financially stressed, they can be less productive, less engaged, and more likely to leave their job.
Financially stressed employees are nearly five times as likely to admit personal finance issues have been a distraction at work.
One in three full-time employees says that money worries have negatively impacted their productivity at work.
Financially stressed employees are twice as likely to be looking for a new job (36% of financially stressed employees compared to only 18% of non-financially stressed employees).
Knowing how financial stress can be taxing on productivity, retention, attendance, morale, and overall engagement, how can you and your HR professional colleagues try to help reduce your employees’ new financial burden?
One possible option is to help them investigate the Public Service Loan Forgiveness (PSLF) program, if you qualify as an eligible employer. It is likely that many of your employees that have begun repaying their loans may be completely unaware of this program or don’t fully understand it. With that in mind, here is a refresher of the program and how your employees can apply.
Full-time employees of a government or not-for-profit organization may be eligible for forgiveness on the the remaining balance on their Direct Loans after they have:
Made the equivalent of 120 qualifying monthly payments under an accepted repayment plan.
And done so while working full-time for an eligible employer
Full qualification details and definitions can be found on the Federal Student Aid PSLF webpage.
Three common ways an employee can fill out the PSLF form in order to be eligible for the benefit include:
Reminder: Your employer must qualify first.
Printing the form from the studentaide.gov website and filling it out by hand.
Digitally filling out the form on the studentaide.gov website.
Utilizing functionality similar to the PSLF feature through The Work Number® as part of PeopleHQ™.
Once the form has been completed by the employee, they must engage their employer for either a wet signature, digital wet signature or an electronic signature through a tool such as DocuSign.
A recent ADP survey showed that 75 percent of employees want to work for a company that cares about their financial well-being. One way to show employees you care is to seek out financial wellness programs and benefits that can help educate and empower them. With 150 potential debt forgiveness programs and complicated eligibility requirements, you are in a great position to help your employees understand their repayment options and help reduce their stress of not knowing what the best option is for them. To learn more about how Equifax can help you reduce HR administrative burden while better supporting your employees’ financial well-being through the PSLF program, view our on-demand webinar Student Debt & PSLF: Helping Your Employees Navigate the Maze.
The information provided is intended as general guidance and is not intended to convey any tax, benefits, or legal advice. For information pertaining to your company and its specific facts and needs, please consult your own tax advisor or legal counsel. Links to sources may be to third party sites. We have no control over and assume no responsibility for the content, privacy policies or practices of any third party sites or services.