Investing in People
There’s a nice article on Bloomberg, primarily about Student Loan Genius, a local Austin startup that promotes different ways companies can support paying down student loans. At BP3, when we discovered Student Loan Genius we knew we had discovered a kindred spirit company in that they are totally aligned with our own values of taking care of our team. For the article they also interviewed members of the BP3 team:
But before setting aside money for retirement, most feel the need to retire student loan debt. That’s easy to say but harder to do for millennials exiting college these days. Many are in the same boat as Nolan Grace, a 24-year-old who graduated from Purdue University with “very significant” loans. “It’s the biggest weight on my life right now,” he says.
Luckily, Grace works for an employer—Austin-based software-services company BP3 Global Inc.—that helps him with loan payments in an increasingly popular way. BP3 uses a platform called Student Loan Genius to let it match as much as $100 per month in Grace’s debt payments, one of several companies offering similar benefits.
So why does a ompany like us offer this benefit? We do it because we think it makes a material difference in the financial health of our team. For the same reason we offer a 401k match. Had my first two employers offered a 401k match, the employees of those two companies would be dramatically better off, financially. Student Loan matching is another way to help our team, to invest in their education, and to show we care – a point that was made nicely in another article, by Plan Sponsor, covering the same benefit with a wider lens that emphasizes the investment:
Scott Francis, CEO of BP3, says more than one-third of his employees would be categorized as Generation X, but there are also a significant number of Millennials and more every year. He explains that BP3 hires five or six employees each year from college intern or recruiting programs.
The company has a generous retirement benefit offering—a 401(k) plan with automatic enrollment, a Roth account option and a company match of 50% up to 7% of employee deferrals. The 401(k) plan has a 95% participation rate. BP3 also pays the full premium for employee and dependent health care [insurance].
However, Francis noticed news reports about the problem of student loan debt and employees putting off saving for retirement because of this debt. He says that was also a conversation among employees at his company. […]
He realized that not only would a student loan repayment benefit be a differentiating recruitment tool, but it also aligned with the company’s philosophy of showing it values its employees. “We value the education investment employees have made for themselves,” Francis says. “Salary signals value for employees, but the student loan repayment benefit would signal value in a more exclusive way. Plus, we want employees to be able to pay back their loans and to be responsible for paying down all their debts.”
What I love about Student Loan Genius the most is that they care as much about taking care of my team as I do. Everyone I talk to loves their level of service and attention. And we had a nice surprise when we offered the loan benefit – we hadn’t realized how many had children with college loan debt, who could also benefit.
It has been a great 2 year journey together, and I look forward to a day when a benefit like this is commonplace. Til then, we hope it signals the kind of place BP3 is – and the kind of values we have as a company.