Medical professionals are often saddled with student loan debt that they struggle to pay off, but a not-for-profit community hospital in New York state has come up with a way to help.
Montefiore St. Luke’s Cornwall, which has hospital campuses in Newburgh and Cornwall in the Hudson Valley, is offering a new benefit to its employees to help them pay down their student loan debt.
Eligible employees will be able to convert unused paid time off (PTO) into an employer contribution of up to $5,000 per year to help pay off those student loans, the hospital said in an announcement.
Montefiore is one of the first hospitals in the country to offer such a plan, which is being administered by Tuition.io, a student loan repayment platform that has worked with companies of all sizes, including Live Nation, HP, Estee Lauder Companies, Staples and others.
Under Montefiore’s Student Loan Repayment Program, full-time and part-time employees can transfer their unused PTO—vacation days, sick days and personal time—to the repayment of their student debt, including federal and Parent PLUS loans. Eligible employees will be able to convert 30 to 75 hours of unused PTO into payment against student debt, which will be distributed semi-annually with a maximum of $5,000 in annual contribution.
“Medical graduates are often faced with what can seem like an insurmountable amount of debt as they transition from student to medical professional,” said Dan Bengyak, vice president of administrative services at Montefiore. The repayment program is a new employee benefit to help address the challenge faced by thousands of workers today, he said.
"This one has been a real home run," he said, in an interview with FierceHealthcare.
(Montefiore)
The program helps employees while solving the issue of unutilized paid time off.
“It’s estimated American workers forfeit 212 million vacation days amounting to $62.2 billion in lost benefits in a year,” said Scott Thompson, CEO of Tuition.io. Rather than losing vacation days and other accrued paid time off, Montefiore’s program gives employees a new option, he said.
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At Montefiore St. Luke’s Cornwall, employees are allowed to roll over unused PTO from year-to-year and the hospital found employees were building up large reserves of time, Bengyak said. The hospital was also aware of the big problem of student loan debt.
"Student loan debt has now surpassed any other kind of debt" facing people throughout the country, he said. With an eye toward employee wellness, including financial wellness, the hospital decided it could solve two problems at once.
The hospital rolled out the new benefit at the start of the year and has initially offered it to all non-union employees, he said. It plans to offer it to union employees during future contract negotiations.
"We're targeting everyone," he said, including physicians and other medical professionals who are employed by the hospital. Employees from ancillary departments, such as the hospital laboratory, have also benefitted.
It's not just a popular benefit with younger employees, he noted. The hospital encourages life-long learning and some of its more senior employees who are continuing their education were among the happiest about the new benefit. Employees can also use the benefit to help pay off student loans they have taken to help pay for their children's education.
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The hospital has two windows each year when employees can decide how much PTO they want to exchange to help pay student loans. In the first window, employees exchanged PTO valued at about $90,000, Bengyak said. He expects that amount will increase slightly in the next window at the end of the year, as employees look at how much vacation time and other PTO they have left.
Bengyak estimates the hospital will pay out a total of $200,000 in the program's first year to help pay down student loans.
But since the PTO is already accruing and accounted for in the hospital's budget, "this is really net neutral. We're giving them another way to spend it," he said. "We're not adding to our bottom line."
When employees choose not to take PTO, the hospital does not have the cost of replacing those employees when they are out and does not lose productivity, he said.
The company looked at a number of private companies to administer the new benefit before choosing Tuition.io, which offered very competitive rates, he said. The cost for the hospital is "very minimal," he said.
The new benefit is a recruitment tool, he said. "A lot of people have career aspirations beyond the job for which we hire them," he said. Combined with a $6,000 tuition reimbursement, employees who choose to convert up to $5,000 in PTO to pay back student loans can get up to $11,000 in a calendar year to help fund their education.
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The amount can cover nearly a year's worth of an employee's part-time schooling, he said. "It's a really attractive benefit."
The issue of student loan debt has become part of the national discussion. At a hearing in June before the House Small Business Committee, lawmakers heard testimony about how the burden of medical school debt impacts physician practices and primary care.
The committee’s chairman, Rep. Nydia M. Velázquez (D-NY), said she fears student loan debt has had a detrimental effect for medical professionals, including keeping physicians from starting or joining private practices, working in rural and underserved communities and influencing the choice of specialties as doctors chose higher-paying specialties rather than primary care.
Medical schools are aware of the issues and some are getting innovative. Last year, NYU’s medical school decided to offer free tuition to all its students, saying it hoped that would encourage more students to pursue careers in less lucrative specialties such as primary care. Kaiser Permanente also decided to offer free tuition to all the medical students in its first five graduating classes at its new medical school, saying it hoped by reducing the financial burden on future doctors for their education it would encourage students to go into primary care and other lower-paying specialties.