The Burden Of Debt

The New ‘Wow’ Employee Benefit

Innovative new program uses 401(k) employer matching dollars to pay student loan debt.

March 07, 2019 — CLEVELAND–(BUSINESS WIRE)–Student loan debt is having a tremendous impact on millennials’ lives. It is influencing where employees work, and how they live and spend their money. College graduates with student loans want help from employers tackling this issue.

Employers are getting the message. To hire and retain college graduates, companies are adding student loan assistance programs. The challenge to employers is providing meaningful assistance without breaking the bank… and the headlines tell the tale: student debt is a national financial crisis.

The statistics are staggering:

  • 44 million borrowers have accrued $1.5 trillion in student debt.
  • $32 billion of student loan debt is in default and more than 1 million borrowers default each year. By 2023, nearly 40% of borrowers are expected to default on their student loans.
  • 70% of recent college graduates have student loans.

Challenge to employers: building a much-needed NEW employee benefit

While recent graduates feel tremendous stress in paying their student loans, employers feel a different stress. Many are in a war for talent. The competition for college-educated workers is not new, but in today’s labor market it is more intense than ever before. As of November 2018, the national unemployment rate was just 3.7%, and unemployment for college graduates was only 2.0%.

For companies whose success relies on professionals, bringing aboard and retaining high-quality talent is a top priority. For the prospective employee, salary is only one consideration with creative and meaningful benefits packages becoming a competitive necessity. A recent headline termed student loan repayment “The Job Perk of the Future.”

Clearly, employers are taking note. While only 4% of companies offered student loan assistance in 2018, this is expected to increase by 24% in 2019.

How companies are currently providing student loan assistance

Some companies are beginning to provide direct student loan repayment assistance by contributing an amount to their employees’ student loans. However, direct contributions are a major expense to employers. If ABC Company provides $150 of student loan assistance per month to a participant, that is $1,800 annually. If 200 employees participate, the total cost would be $360,000 per year. Even if ABC Company attempts to cap their per employee lifetime exposure to $10,000 per employee – they are still shelling out $2,000,000 in incremental expenses.

A New & Innovative budget neutral idea: using matching dollars for student loan repayment

David Krasnow, a leading national retirement plan advisor, has heard the call from his corporate clients for the last 2 ½ years to help their employees struggling with student loan debt. In 2018, Krasnow partnered with BenefitEd to offer a new, cutting-edge, budget-neutral employee benefit company called Thrive: Flexible Matching Program.

Thrive is a unique innovation that empowers employees to decide where to allocate their contributions, as well as where they will receive their employer match. For example, if an employer’s retirement plan has a matching provision of 5%, an employee can determine how much of their 5% match to allocate to retirement and how much to their student loan debt.

The result is a customized retirement and student loan repayment program – with flexible matching. Thrive allows employers to provide a “Wow” benefit that is budget neutral by simply allowing employees to allocate existing matching dollars without an additional cost to an employer.

a unique innovation that empowers employees to decide where to allocate their contributions, as well as where they will receive their employer match...

Research shows Thrive will have tremendous impact on employees with student loans because:

  • 46% of employees would rather have student loans repayment assistance than a 401(k)/403(b) match.
  • 92% would take advantage of a match for student loan repayment similar to a 401k/403(b) match. Fred Reish, a leading ERISA attorney, reviewed the Thrive Program and termed it “a unique innovation for companies that believe a student loan program would be a valuable benefit to attract and retain employees.”

As companies evaluate and consider student loan assistance programs, Thrive’s innovation of using existing employer matching dollars to help employees repay their student loans – without increasing their benefits budget – is breaking new and much-needed ground. This program is likely to become an important benefit for millennials and an important tool for leading-edge employers in appealing to employees.


  • Student loan debt is a crisis affecting 44 million Americans worth $1.5 Trillion and impacting 70% of new college graduates.
  • Cutting-edge companies are adding student loan assistance programs.
  • Assistance programs available today add significant costs for employers.
  • Thrive has a unique budget-neutral solution for companies enabling employees to make contributions and use 401(k)/403(b) employer matching funds for student loan repayment.
  • Thrive helps innovative employers to hire and retain top talent without increasing costs.



To learn more about how Thrive would work for your company and employees, visit or call 216-595-0700.