The Red Lobster Top Secret Student Loan Program

When companies try to get young people hired with the promise of 'tuition assistance,' here's what they don't tell you.

When you wait tables or tend bar at Red Lobster, “The best benefits await you,” says the chain’s list of benefits

It includes this…
Student Loans
Employees and their families can access low-interest educational loans. Pay for tuition, room and board or supplies at accredited colleges, private K-12 schools and approved technical schools.
…which is a smart business move, since student loan debt in the United States has now surpassed credit card debt with its 1.1 trillion dollar price tag. The number of college students borrowing money for college has continued to rise, and so has the amount of money borrowed, as tuition costs skyrocket.

Michael Cohen, a lawyer who specializes in employment law at the firm Duane Morris in Philadelphia

Companies that are “figuring out how to attract the best and brightest” are moving toward student loan assistance as an added benefit.
“In light of the unpredictability of health care costs, and benefits associated with health care becoming more and more expensive, organizations are providing and advertising the possibility of tuition assistance and tuition reimbursement,” Cohen said. “It’s a great way to attract good people.”

But just how good is the Red Lobster student loan program?

It’s hard to tell, because the seafood restaurant refuses to answer emails and phone calls on the topic. That seems counter-intuitive, since the purpose of benefits packages is to market them to prospective employees so they work for you instead of your competition.
But once you delve deeply in the Red Lobster student loan program, you learn why the company hasn’t commented. It’s fishy.
Debt.com sent a writer to apply as a Red Lobster waitress. In five months on the job, she learned more about the company’s benefits for pets than college students. The reason? The Red Lobster “student loan program” isn’t really a loan program at all.

Here’s Jess Miller’s report…

"On September 4, I applied for a job as a waitress at the biggest Red Lobster in South Florida. On September 15, my general manager offered me the job."
And though he covered how much jewelry I was allowed to wear, how to do my hair, and the uniform requirements, he didn’t cover any of the benefits of the job. Instead, he gave me a handbook and told me to read through it.
So I did, and in the whole book, the only mention made of student loans was sandwiched between a mention of pet insurance and discounts on fitness. I started gathering information from other places.

The employees I talked to never heard of it.

Two of the managers I asked about it gave me vague instructions to go online to the My Total Rewards department, where employees can sign up for other benefits like medical and dental coverage.
I found a link called “Apply for a student loan” — but when I clicked on it for more information, I got an error that said “You’re not authorized to access this component. (40,20).” I called HR, and they directed me to the My Total Rewards department, which gives out information on other benefits Red Lobster offers its employees, like dental and medical coverage.
After three hours across three days of talking to Total Rewards, I made a little progress. There was another student loan section on the intranet they gave me a direct link to — alongside something about pet insurance and emotional and legal counseling.
The page told me about who was eligible (even my grandmother!), some very vague “flexible repayment options,” and the maximum amount I could borrow: $100,000. There was nothing about the terms or interest rate of the loan.

Instead, it pointed me to another site — a Wells Fargo page

with links to an “Employee Mortgage Program,” “Home Equity Loans,” and “Education Financial Services.” There was no mention of Red Lobster, so I called Wells Fargo and asked.

The Red Lobster Student Loan Program That Is Actually A Wells Fargo Loan

Contrary to everything their website and promotional material states, Red Lobster doesn’t have a student loan program. “Assisting with student loans” is actually just code for “Wells Fargo Collegiate Loan.”
Two different Wells Fargo reps told me I could sign up for a loan and make no payments while in school, enjoy a six-month grace period, and choose from a variable or fixed interest rate. But when I asked about special deals for Red Lobster employees?
“We don’t have any specific loans for Red Lobster.”

False advertising?

Just to make sure I didn’t miss something, I called Red Lobster Human Resources, My Total Rewards, and Red Lobster Corporate Headquarters several more times, on different days.
They all told me the same thing — go online and apply, but didn’t specify where or how — until finally a Red Lobster HR rep transferred me directly to Wells Fargo after I’d asked to sign up for the loan.
I asked Bruce Elliot, manager of compensation and benefits at the Society for Human Resource Management, if Red Lobster had purposefully misconstrued their benefits package.
“Companies are always trying to put the best face on their rewards packages,” Elliot said. “But we don’t see a lot of what you experienced at Red Lobster. More often than not, organizations will describe their benefit packages in a fairly honest and straightforward basis to their employees, because they recognize that there’s a lot of liability.”
Though Elliot said he makes it a practice of not criticizing other companies’ practices, because “there could be something going on that I’m not aware of,” he did say that it was misleading to list the loan as a benefit, unless Red Lobster had negotiated lower interest rates or lower fees on the loan.
I told them they hadn’t.
“That’s an unfortunate practice,” he said. “It’s setting up an expectation among candidates and employees that there’s a benefit there, when in fact it’s really more of a referral.”

Sauce: http://www.debt.com/news/2015/secret-red-lobster-program