?As the pandemic-era student loan payment pause nears its end, one major U.S. company is joining a small but growing cache of employers offering a benefit to help employees tackle student debt.
Adidas, which has roughly 10,000 U.S. workers, is offering its full-time employees $100 a month—totaling $1,200 a year—toward their student loan debt, the sports apparel company announced this month.
“This is an exciting new program for our people who said that student loan support would significantly help them,” Rupert Campbell, president of Adidas North America, said in a statement. “Paying for education should not hold our teammates back, so we are happy to support them with this benefit.”
Student loan repayment is a popular perk—employees overwhelmingly say they want the benefit—but the offering is still a fairly rare one among employers. According to SHRM’s 2023 Benefits Survey, released June 12, just 8 percent of employers offer a student loan benefit.
SHRM Online rounded up additional news on the topic.
Adidas Also Launching Financial Wellness Program
Employees can apply for the new student loan repayment benefit after being employed at Adidas for one year. Full-time employees from all Adidas divisions—including corporate, retail and distribution—can sign up for the new benefit.
In addition to the student loan benefit, Adidas also launched a financial wellness program, offering employees free access to various financial resources such as financial coaches, seminars and webinars. The majority of Adidas employees with student loan debt say they are experiencing financial stress, according to the company.
Student Loan Debt Decision Could Spark the Need for More Employer Assistance
The announcement from Adidas comes as the Supreme Court mulls the Biden administration’s move to cancel up to $20,000 in federal student loan debt for individuals. The Biden administration announced last year that the federal government would repay up to $10,000 in student loans for borrowers who earned less than $125,000 during the pandemic and up to $20,000 for those who received Pell Grants.
The Supreme Court, which in late February heard two cases challenging President Joe Biden’s student loan forgiveness plan, is expected to rule soon.
Industry experts contend that the case puts a spotlight on the massive toll of student loan debt afflicting Americans, highlighting a need for additional support from employers. It’s also likely that the Supreme Court case—no matter the outcome—will heighten interest in student loan repayment benefits.
“The nationwide conversation that this news has sparked is reigniting the push for workplace programs that help employees navigate their student loans, which are a massive financial burden on countless individuals,” said Edward Gottfried, director of product at Betterment at Work, a New York City-based financial wellness provider. “This can take a few different forms, from educational resources and repayment tools that make it easy for workers to understand their debt and how to prioritize paying it down over specific time horizons, to benefits such as matching contribution programs or direct financial assistance.”
As Employees Prioritize Financial Benefits, Some Employers Cut Back
Persistent high inflation, drastic market swings and recession fears have taken a big hit on employees’ financial confidence, leading them to value financial benefits more than ever, research suggests.
A report from Morgan Stanley at Work found that roughly 69 percent of employees said they are paying more attention to reviewing their financial benefits in 2023, up 9 percentage points from last year. Meanwhile, the vast majority of employees (89 percent) said they would be more invested in staying at their company if it provided financial benefits that met their needs, according to the financial service firm’s survey of 1,000 U.S.-employed adults and 600 HR leaders.
But there’s a problem: While employees value these offerings, some employers are dropping them as they prepare for an economic downturn. One in 4 HR leaders said they are cutting back on employee financial benefits to prepare for a recession. The exact benefits being cut weren’t specified in the report, but financial benefits ran the gamut from financial counseling and budgeting help to student loan repayment programs and retirement planning.
“Belt tightening is a natural part of any business cycle, but the challenge is it has been so long since we’ve experienced a sustained downturn, like the bear market we are in today, that many employees—and employers—simply haven’t been through it before,” said Brian McDonald, head of Morgan Stanley at Work. “This makes a tough situation all the more challenging.”
Pandemic Payment Freeze Ending
The pause on student loan payments, which has gone on for three years as a result of the pandemic, will end this summer regardless of how the Supreme Court rules on the Biden administration’s student loan debt forgiveness plan.
Interest on the loans will begin accruing again on Sept. 1, and borrowers will have to begin making payments in October.
President Donald Trump put the payment pause in place in March 2020 as an emergency pandemic measure.
(Associated Press and NerdWallet)