Burdened with monthly student loan bills of more than $1,000, a woman in the finance department at the software company Kronos was facing 30 years of payments that would amount to over $300,000.

“Her original loan was about $90,000,” says Dave Almeda, chief people officer at Kronos. These monthly student loan payments meant she wasn’t able to contribute as much as necessary to her retirement plan to be on track for a secure retirement.

Her situation is not unusual these days. Almost 1 in 3 Millennials or their partners is carrying a student loan balance, according to a Prudential study, and the problem isn’t confined to recent graduates.¹ Even those in their 30s can find themselves just starting to repay their loans.² The amount of debt is also rising: In 2015, new graduates carried about $34,000 in student loans, up from $20,000 just 10 years earlier.³

One way graduates are finding relief for student loan debt is working for an employer that understands attracting top talent means offering benefits that are in high demand, such as student loan repayment plans.

Relieving a Heavy Burden

Financial assistance on student-loan repayment was an obvious choice for inclusion in Kronos’s benefits program, Almeda recounts. Initiated in 2016, the benefit has been wildly popular, because it can make an enormous difference to an employee’s financial well-being.

Kronos helps employees manage their debt in several ways. First, the company offers an incentive to restructure and consolidate loans, then provides a more favorable interest rate. The company itself also makes contributions to help lessen the debt—up to a maximum of $500 a year—without any lifetime cap, directly from payroll, which helps pay down the principal, shortening the life of the loan.

The finance department employee mentioned above was eager to sign up for the assistance program and was also happy to receive the $300 bonus offered to those who enrolled. Together, the contributions from Kronos, lower interest rate and reduction of monthly payments to about $200 less than they were previously “put this Kronite on a plan she could understand and see an end to,” Almeda explains. “It took the background stress about the loan off her plate.”

The loan program carried another benefit for her: more attention to her overall financial picture, which meant a healthy 3 percent increase in contributions to her 401(k) plan after she enrolled.

A Community Partner

Kronos’s culture of caring extends beyond helping its own employees. In an effort to expand opportunity in its home state, the company has initiated a number of educational programs geared to both help students get ahead and provide a path toward tech jobs at Kronos.

At the University of Massachusetts at Lowell, whose campus is near Kronos’s corporate headquarters, students gain valuable information technology experience and financial compensation in Kronos’s co-op program. Sarah Sheehy, who chairs the GiveInspired Committee, explains that upon successful completion of the program, which operates through a partnership administered by the committee and the university, students are given a scholarship to help defray college costs.

The company in turn is able to find well-prepared recruits. “We actually convert a fair amount of those students to full-time employees,” Sheehy says.

Before enrolling at UMass Lowell, Josh Scanlon had served in the military for four years. In his junior year, he joined the core technology team as a co-op program student, which garnered him scholarship money as well as compensation—a substantial boost to his financial situation.

Scanlon continued working part-time at Kronos until graduation, when he was offered a full-time position as a network engineer. Now, after working at the company for a couple of years and gaining a stronger financial footing, he is considering buying a home.

Kronos also seeks to attract graduates of Lowell High School, which is across the street from the university, to join the co-op program at UMass Lowell. “The best and the brightest students don’t always want to stay in the same neighborhood,” Sheehy says. The hope is that they’ll join the program and eventually the company.

“We look for ways we can make the biggest impact,” Sheehy says, “and the biggest difference we can, in multiple ways.” Kronos designed the GiveInspired program to support these goals, she explains. And, she points out, from the point of view of employee satisfaction, GiveInspired has a positive impact on that as well.

The larger community has also taken note of Kronos’s attention to employee pain points and outreach to students. Among the largest tech employers in Massachusetts, Kronos received the 2017 Gold Winner Impact Award from MassEcon, which factors in job growth, investment and community involvement.⁴

 

Content paid for by Prudential.
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