Financial Wellness Benefits That Drive ROI in Healthcare

Why CFOs Should Prioritize Student Loan Repayment Support

In the evolving landscape of healthcare talent management, Chief Financial Officers (CFOs) face a growing challenge: balancing cost containment with competitive benefits that attract and retain skilled employees. Traditional benefits like health insurance and retirement plans remain essential, but financial wellness initiatives—specifically student loan repayment support—are proving to be a cost-efficient, high-impact solution for increasing employee engagement and retention.

The Financial Strain of Student Debt on Healthcare Workers

Student debt is a significant burden for healthcare professionals, particularly among early-career nurses, physicians, and allied health workers. According to the Association of American Medical Colleges (AAMC), the median medical school debt for physicians is approximately $200,000, while nurses often graduate with $30,000 to $50,000 in student loans. These financial pressures can lead to increased stress, reduced job satisfaction, and a higher likelihood of turnover.

From a financial standpoint, high turnover rates in healthcare come at a steep price. The cost of replacing a single bedside nurse is estimated at $52,350, while physician turnover can cost an organization upwards of $500,000 to $1 million when factoring in recruitment, lost revenue, and onboarding expenses. Offering student loan repayment benefits is an effective strategy to mitigate these costs by improving retention.

The ROI of Student Loan Repayment Assistance

Investing in student loan repayment support yields measurable returns by improving retention, engagement, and financial wellness:

• Reduced Turnover Costs: A recent PeopleJoy survey found that 86% of employees consider leaving their job for an employer offering student loan benefits. Given the high cost of replacing healthcare professionals, even a modest reduction in turnover can result in substantial savings.
• Increased Productivity & Engagement: Financial stress impacts work performance. A PwC survey reports that 76% of employees experiencing financial stress are distracted at work, leading to reduced productivity. Alleviating student debt can enhance focus and overall job satisfaction.
• Competitive Advantage in Recruitment: With workforce shortages impacting hospitals nationwide, particularly in nursing and primary care, student loan repayment benefits set healthcare employers apart. Institutions that offer financial wellness benefits see higher application rates and attract top talent.
• Maximized Tax-Advantaged Benefits: Under the CARES Act extension, employers can contribute up to $5,250 per employee annually toward student loan repayment tax-free through December 31, 2025. Leveraging this provision allows organizations to provide impactful benefits without increasing taxable income for employees.

Implementing a Cost-Effective Student Loan Benefit

Healthcare CFOs can implement student loan repayment programs strategically to align with financial objectives. Flexible models include:

• Employer-Paid Contributions: Direct payments toward employees' student loans, structured within budget constraints.
• Public Service Loan Forgiveness (PSLF) Optimization: Helping employees navigate the PSLF program ensures they receive the forgiveness they qualify for, reducing financial stress without additional employer expenses.
• Voluntary Benefit Models: Offering student loan coaching and refinancing options through a financial wellness provider at no direct cost to the employer.

By integrating student loan repayment assistance into benefits packages, CFOs can achieve a strong ROI, reducing turnover expenses while improving workforce morale and productivity. As financial wellness increasingly becomes a factor in employment decisions, forward-thinking healthcare organizations that adopt these benefits will have a competitive edge in retaining and recruiting top talent.

Strategic Investment, Stronger Workforce

The financial pressures of student debt are a growing concern for healthcare employees and directly impact retention, engagement, and productivity. For CFOs, implementing student loan repayment benefits is not just an employee perk—it is a strategic investment that delivers measurable cost savings and enhances the financial well-being of the workforce. By leveraging tax-advantaged opportunities and optimizing loan forgiveness programs, healthcare organizations can drive long-term sustainability while maintaining a competitive edge in talent retention.

To explore the full financial impact of student loan benefits and see how they can drive ROI in your organization, read our full white paper or reach out to us for more insights.

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Sources

1. Association of American Medical Colleges (AAMC): Medical Student Education: Debt, Costs, and Loan Repayment Fact Card for the Class of 2023 https://students-residents.aamc.org/media/12846/download
2. NSI Nursing Solutions, Inc. 2024 NSI National Health Care Retention & RN Staffing Report https://www.nsinursingsolutions.com/Documents/Library/NSI_National_Health_Care_Retention_Report.pdf
3. NurseRegistry: Cost of Nurse Turnover in Healthcare Facilities https://www.nurseregistry.com/blog/cost-of-nurse-turnover/