Companies With Education Benefits: CommonBond
By putting students first, we’re able to lower the costs associated with school and help people pay off their loans without emptying their bank accounts.
David Klein, CommonBond CEO and Co-founder
Higher education has proven upsides for society: it leads to stronger economic growth, a healthier population, and greater social cohesion. But the current pathways to higher education are broken in the US. Americans owe over $1.5 trillion in student loan debt and they’re having more trouble paying off those loans than ever before.
Recently, many politicians have made student loan reform a key issue for their platform, and understandably so. Having a workforce that’s a mix of poor and uneducated people is a recipe for disaster. Relief can’t come soon enough.
While the gears of government slowly grind on, some businesses are stepping in to pick up the slack. Making college education cheaper for their employees has a quantifiable benefit: it entices employees to stay within an organization and contribute to it with greater skills. This is especially important in a competitive labor market that sees employees skipping between companies more often.
According to a 2019 report on employee benefits by the Society for Human Resource Management (SHRM), 56 percent of businesses provide some form of undergraduate or graduate tuition assistance. Changes in university offerings—including the proliferation of online programs—mean businesses can afford to do more than they used to. While sending an employee to a physical campus for their education would have severely cut into time and cost, signing them up for an online bachelor’s degree is now a cheap and flexible option.
It’s not always so straightforward, though. Most benefit programs come with caveats. Some companies require workers to cover their own tuition costs, which the company reimburses (conditionally) at a later date. Other programs only cover a certain number of college credits or a certain range of subjects, requiring that the employee maintain good grades (while continuing to work, of course). Eligibility may be contingent on having already worked at the company for a set period of time. More needs to be done to make this process easy for employees to navigate.
Tuition assistance helps educate a workforce, but it does little to provide relief to the $1.5 trillion in student debt already looming over the nation. Student loan forgiveness as an employee benefit is rare, with only 8 percent of companies offering such programs.
CommonBond is one of them.
Interview with CommonBond CEO David Klein
CommonBond was founded in 2012 with the goal of reimagining the student loan space by offering affordable products in a straightforward language. That meant offering loans that had low monthly rates and transparent terms, as well as a customer service team that could easily explain them to customers.
“By putting students first, we’re able to lower the costs associated with school and help people pay off their loans without emptying their bank accounts,” says CommonBond CEO and co-founder David Klein. “To date, we’ve funded over $3 billion in loans, reached over 250,000 users, and partnered with over 300 corporate clients to offer student loan benefits and financial counseling services to workers post-grad.”
How Does CommonBond Help Employees With Student Loans?
Notably, CommonBond works to relieve student debt within its own workforce. Starting in 2017, the company began offering enterprise-level student loan benefits as a way to attract and retain top talent, both for CommonBond and in the employer market more broadly. Through their CommonBond for Business program, they help companies offer benefit packages that can address employee student debt challenges.
“A large portion of our workforce are millennials, and we know statistically that 70 percent of millennials carry student loan debt,” Klein says. “As a company that understands the burden that student loans can have on individuals, we felt it important for us to offer an employee benefit that helps our own employees pay down their student loan debt and achieve their own financial goals.”
Student loan debt doesn’t just have a financial cost. It has a psychological one, too. Surveys show that student loans take up the largest mindshare of workers early on in their careers. Before they think of saving for a home, buying a car, or putting away money for retirement, they’re thinking about their student loan debt. It’s not a healthy mindset for anyone, and it doesn’t make someone a better worker. But at CommonBond, employees can receive up to $1,200 a year towards their student loans.
“By putting $100 a month towards our employee’s student loans, we are helping them come to work and be more present in their day-to-day responsibilities, which is ultimately a win-win scenario both for our company and our workers,” Klein says “Overall, the more money we’re able to help people save on their student loans, the more value we create as a company.”
Dave Carter, senior director of enterprise at CommonBond, is a direct recipient of two types of student loan benefits: first as a borrower, and then as an employee. He found CommonBond while looking for ways to finance his MBA at NYU, and ultimately saved himself $15,000 in the process. Invigorated by those results, he joined the company as an intern, and then full-time employee.
“CommonBond puts its money where its mouth is, helping not only consumers with their student loan debt burden, but also its own employees,” Carter says. “The employee benefit of $100 month towards your student loan debt is just one of those ways they demonstrate that commitment towards helping their employees.”
As the workforce becomes increasingly educated, we’ll likely see more companies institute even more education benefits for their employees. In a competitive labor market, it’s just good business sense.