Forgivable Student Loans Helping Employees Advance

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Objective: This entry showcases how one urban hospital – Brigham and Women’s Hospital – used a forgivable loan program to boost employee retention rates and help employees to move up the career ladder.

Main Topic: Anchor Institution
Sub Topic: Employer
Sub-Sub Topic: Employee Advancement

Geography: Boston
Major Participants: Brigham and Women’s Hospital (BWH)

Background: Around 2005, Brigham and Women’s Hospital began to evaluate its workforce development plan. It became clear that there were several job openings available above the entry-level position, but these jobs were hard to fill. BWH wanted to find a way to encourage its current employees to enhance their skills through education and training to fill these open roles.

How it happened: To encourage employees to seek further education, BWH has created the BWH Educational Financial Assistance Program (EFAP). This program covers all employees who are not part of a collective bargaining agreement but who are enrolled in educational programs for healthcare careers in high demand by BWH (such as medical radiology, occupational therapy and respiratory technology). The reimbursement is in the form of a $10,000 forgivable tuition loan.

There is a strict vetting process for this program, including both managerial and external recommendations. Terms of EFAP include: employees must be employed at BWH for at least one year in a non-contract position, must be in good academic standing, and must commit to at least 2 years of continuous employment after graduation in a regularly scheduled position at BWH for the loan to be forgiven.

In addition to the loan program, there are separate career coaching services at BWH that EFAP students can enroll in if needed. This helps staff members enrolled in EFAP to navigate the employee development system.

Results for hospital: From the program’s inception in early 2007 through July 2011, 65 BWH employees have been awarded these forgivable loans, with 28 being placed in new positions upon graduation. 68% of participants enrolled in nursing programs at the BSN level, 14% in radiologic advanced modalities such as MRI, CT and Mammography, and 18% sought education for other hospital careers. A total of $479,000 has been awarded to employees in the form of forgivable loans. Only three BWH employees have defaulted on their EFAP loans.

The program has helped BWH retain employees for an additional two to four years, depending on the program. 80% of employees who took advantage of the career coaching were employees holding entry-level positions. These efforts help the hospital save on training costs that would be associated with new hires.

EFAP creates shared value for the BWH and community: While the education and career coaching benefit employees and help them move up the career ladder, it also benefits BWH by training a cohort of workers who can step in to high-demand positions at the hospital.

Challenges: At the very beginning, the workforce development group at BWH had to go back and forth with the hospital’s legal department to ensure that the loan program, given the exchange of money, was legal. This took almost a year and required all those involved to have patience.

Now that the program is in effect, it has been a challenge to recruit candidates. Despite significant advertisement of EFAP, many employees still do not know about it; others are skeptical that the loans are “too good to be true.” Moreover, the selectiveness of the program makes it somewhat challenging to recruit qualified, dedicated employees. Also, recruiting a diverse applicant pool has been difficult. There are many more people interested in obtaining nursing degrees than others. This has its own implications: nursing degrees are expensive and require a math and science background. As a result, the applicants are overwhelmingly white females from non-inner city neighborhoods. BWH is actively seeking ways to diversify EFAP applicants,

Lessons learned: Early on, BWH learned that the program would not work unless precautions were put in place to ensure that the employees were taking ownership for their education. Rather than giving away free tuition assistance, it was necessary to give employees responsibility: they had to pass their classes and certification exams, as well as make a good faith effort to retain a job at BWH after graduation. Otherwise, the students are required to pay the loans back. As a result, the program is competitive but the employees who partake in EFAP have high success rates and rarely default on their loans—a win-win for BWH and students.
 

Last Updated on February 4th, 2012

TAGS: jobs | business | shared value | anchors | workforce | training | boston | brigham & women's | employee retention