it’s estimated that 32% of all US employers will offer student loan contribution programs by 2021
Recruiting in a time of low unemployment is tough in all industries. But, recruiting in healthcare is especially challenging with both the rising cost of education combined with an exceptionally low unemployment rate of 2.6% in the field. With the cost of turnover increasingly high, healthcare employers are now seeking more innovative ways to attract and retain top talent.
One of the exciting newer benefits that is becoming much more common is employer-student loan repayment assistance. In fact, it’s estimated that 32% of all US employers will offer student loan contribution programs by 2021. It’s clear employers in healthcare are already moving much more quickly.
Because the healthcare industry requires a highly educated and specialized workforce, the student loan repayment benefit can be especially impactful. You cannot be a nurse, a pharmacist, a physician, or any other specialized role in a health system without a college education – but unfortunately, wages in those fields aren’t keeping up with the cost of that education. While other industries may face a changing education landscape, it’s unlikely healthcare will in the near future. Healthcare professionals are required to go through years of high-cost education to be able to perform patient care safely.
nurses’ wages have hardly increased to compensate
Adjusted for inflation, the average cost of a four-year degree at a public institution has increased 63% since 2002. Yet, nurses’ wages have hardly increased to compensate. In 2002, nurses made about $50,000, which has the same buying power as $71,000 today; however the average salary of nurses today is $70,000.
Likewise, physicians are feeling a similar burden. The average debt of physician graduates has increased by over $100,000 since 1991. The average wage of family practice physicians was $105,000 in 1989, when adjusted to 2018 dollars that’s an average salary of $190,000. Today the average annual salary of a family practice physician is $199,000. That represents very little growth in salary despite a growing burden of student loan debt.
The demand for healthcare workers is set to increase at a rapid pace. A large portion of America’s population is aging, which means a potentially overburdened healthcare system. This will lead to increased responsibility for healthcare professionals who must provide more services for more people than ever before. At the same time, the eligible applicant pool is not keeping pace with this growing demand. It’s imperative we encourage college students to pursue careers in the medical field to meet these growing needs. Unfortunately, the fear of getting into large debt is often a deterrent for young people. That’s why the adoption of the student loan repayment benefits, through platforms like Tution.io, will allow budding healthcare professionals to have peace of mind when deciding to make the leap into the field.
21-48% reduction in employee turnover rates among their healthcare clients
Loan repayment benefits will help grow a larger group of healthcare workers, and we are seeing the initial impact of these programs today. The student loan repayment program is a relatively new, but a highly desirable benefit, that acts as a competitive advantage for employers. Health systems offering this benefit can set themselves apart and attract and retain top new talent. To date, Tuition.io has seen a 21-48% reduction in employee turnover rates among their healthcare clients. Not only does Tuition.io’s service allow employers to contribute to employees’ student debt, but the platform also provides a variety of financial wellness tools that aggregate data and provide best practices for repayment.
We are on the verge of a crisis in the healthcare industry and unless we find solutions quickly, our body of medical professionals will become even more strained. With a strong economy and low unemployment rate, companies across all industries must find ways to bolster benefits to aggressively attract top talent. Through focusing on better benefits that align with what employees need the most, like student debt repayment, employers can and must set themselves apart.
Jeni Burckart is a licensed pharmacist, prominent student loan expert and Senior Director of Healthcare for Tuition.io.
Weekly news and industry insights delivered straight to your inbox.