In 2019, Nick Smith graduated with $50,000 worth of debt — $30,000 in student loans and $20,000 with a student line of credit.

Low-paying jobs and a high cost of living made it hard for Smith to make a dent on his debt until he got hired as a mechanical technologist in Halifax at Dillon Consulting Ltd. In April 2021, Smith received an email from his employer asking if he’d be interested in a student debt repayment program. His answer was a resounding “yes.”

Dillon Consulting has been working with YR Plans Inc.’s Smart Benefit program to help some of their employees pay down their student debt and officially made the program available to staff in February 2022. Smith has been part of the program since its inception at the company. For companies providing debt repayment support, the goal is to improve the well-being of employees dealing with the stress of student loans. Some companies say there’s a major perk for employers, too — the benefit helps attract and retain employees.

Read: Dillon Consulting helping employees pay down student debt

At Dillon Consulting, employees can repay student debt by using employer contributions to the company’s deferred profit-sharing plan that matches employee contributions to the group registered retirement savings plan. “Employees can contribute to their RRSP and then take the DPSP match and put it toward paying down their student debt,” says Tanya Cross, a partner at Dillon Consulting.

“Listening to our employees, we have learned that the stress that student loans can cause impacts overall well-being,” she says, adding the organization is confident the ability to “gain control of their finances” creates a better environment for its workers.

Currently, five companies are offering Smart Benefit and two to three more will be onboarded before 2023. In July 2021, Sun Life Financial Inc. announced it would be partnering with YR Plans to perform a pilot of the Smart Benefit program with a select number of groups that wanted to take part in the program.

Read: Nearly 60% of U.S. employers continuing student loan repayment benefits despite Biden’s forgiveness program: survey

A spokesperson for Sun Life told The Canadian Press the company won’t continue offering the benefit after the pilot ends. “After evaluating our pilot, we have decided to focus our efforts on strengthening existing solutions and our core products, helping clients achieve lifetime financial security,” wrote the spokesperson in an email statement.

While YR Plan’s Smart Benefit technology works by sending money directly to the lender, technology company SimplyCast has been helping employees pay down student loans by adding monthly financial support to their paycheques since early 2016. Saeed El-Darahali, president and chief executive officer of SimplyCast, says he initially launched the program because he graduated with close to $60,000 in debt and wished he had some repayment support at the time.

Amanda Hudson, founder of human resources consultancy A Modern Way to Work, says she sees benefits trends like this pop up from time to time. But when it comes to its effects, she doesn’t think most people are “making or breaking their decisions on where they work or if they stay based on RRSP matching or contributions to their student loans.

“What I do think it’s good for strategically is if you’re targeting a large amount of new graduates. I think a lot of these benefits are employer branding opportunities for people to differentiate themselves from a different company on the surface.”

Read: How Willful is using benefits, flexibility and perks to attract top talent in tight labour market

However, if the goal is attraction and retention, Hudson doesn’t think these peripheral benefits hold as much sway as strong managers and human resources systems, high engagement and fair market salaries.

She says what retains employees most is engagement factors, which include knowing what’s expected of you at work, receiving recognition or praise for good work within the last seven days and having opportunities at work to learn and grow, for example.

From Smith’s perspective, the program has enticed him to stay longer at Dillon Consulting than he might have otherwise. Initially, he expected to take 13 years to finish paying for his loans. “I would have been over 40 years old by the time my student debt was paid off. It was looking pretty grim and I wasn’t really thinking about whether I was going to buy a house or a car or have children because it’s difficult to consider those things with so much debt.”

Read: Majority of North American employees seeking financial wellness benefits, flexible work: survey