Employees at Ally Financial responded with a round of applause when they first heard they were getting a slew of new education benefits.
The financial services company is rolling out three new education benefits including student loan repayment, 529 plan contributions and additional tuition reimbursement benefits for its 8,500 employees early next year. When the company’s CEO, Jeffrey Brown, announced the new benefits, employees were thrilled.
“There was an enormous amount of excitement,” says Kathie Patterson, chief human resources officer at Ally Financial.
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Ally’s new benefits include a $100 per month contribution to eligible 529 college savings plans and $100 per month towards student loans, with a lifetime maximum cap of $10,000 for both benefits. The company is also reimbursing tuition up to $10,000 per year — a more than 50% increase in reimbursement offerings
“We look for what we can do to modernize our benefits,” Patterson says. “We know it helps us to attract, retain and engage our workforce.”
A small but growing number of employers offer education finance benefits. While more than half of companies provide graduate or undergraduate tuition reimbursement, just 11% provide 529 plans and 8% offer student loan repayment assistance, according to data from the Society for Human Resource Management.
The student loan debt crisis has ballooned to more than $1.5 trillion driving employers to boost their student loan repayment benefits. For example,
“The biggest reason to offer a student loan repayment benefit is it’s the right thing to do for your employees,” Todd Schmiedeler, senior vice president of foundation and workforce development at Trilogy Health, tells Employee Benefit News.
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Patterson hopes the new benefits will give Ally an edge over its competitors in the financial services space — especially during on-campus recruiting events. Ally expects the benefit will also be a key booster for attraction and retention.
“We’re trying to do everything we can to support them in those moments in life,” she says. “That in itself creates a level of engagement.”
