There’s a new role for fintech in nursing homes – it’s being used to stabilize staffing as nursing home organizations are using it to not only attract clinical workers, but also offer career advancement and retention – ultimately building loyalty in exchange for paying down student loan debt.

Short for financial technology, fintech is typically used for mobile banking apps, online lending platforms, and digital payment systems, but now organizations such as Clasp, a fintech start up, are hoping to tie in student loan repayment to long-term employee retention.

Tess Michaels, CEO and founder of Clasp, and Amy Haug, chief human resources officer at CarDon & Associates, spoke at LTC 100 last week about how such initiatives are succeeding in building the workforce in nursing homes.

CarDon’s experience

CarDon, which runs 20 skilled nursing facilities (SNFs) in Indiana, partnered more than a year and a half ago with Clasp, and initially focused on tuition assistance for licensed practical nurses (LPNs), according to Haug. However, collaboration has allowed CarDon to expand to registered nurses (RNs), nurse practitioner (NPs), and physical therapists – roles that are harder to recruit and retain.

CarDon’s approach included upskilling internal staff such as certified nurse aides (CNAs). CarDon was also involved with building pipelines with colleges and universities, and shifting budget allocations from sign-on bonuses and agency staffing to sustainable, loan-based retention strategies, Haug said.

“So right now, we have a pretty mature program for tuition assistance, but most of them are individuals that are getting their LPN,” said Haug.

Now, CarDon’s focus has shifted to getting RNs and other higher skilled workers for which the organization has especially faced competition from hospitals.

“How can we upskill our current workforce more than we recruit on college campuses,” was the main challenge at hand, Haug said. “We ran into some barriers internally with the resourcing of our own staff and our ability to make those connections and do that recruiting, as well as to really get into the marketing and change what we would need to change.”

The partnership with Clasp assisted in achieving the recruitment and upskilling current clinical workers.

“We were looking at everything from upskilling our CNAs through NPs, if they want to do that, by using this [Clasp] program as well as recruiting from the outside,” she said.

During this time, CarDon also emphasized ROI tracking – analyzing payroll, agency use, tuition assistance, and shift premiums – to justify long-term investment in Clasp’s model.

“It is a little bit more of a long-term play … initially you have to invest the time and effort to get it set up, but I’m really looking forward [to] having an opportunity to recruit,” said Haug.

Overcoming workforce barriers

According to Michaels, traditional recruiting and retention strategies are no longer sufficient given that the dual challenge facing nursing homes is a shrinking clinical workforce and rising educational barriers. And overall, many health care roles now require more expensive degrees such as doctorates for physical therapists, and yet compensation hasn’t increased to match.

Moreover, COVID-19 prompted an exodus from nursing homes, driving turnover rates even higher, particularly among Gen Z workers, who have different career expectations and loyalty standards, she said.

In the midst of all this, the common practice of sign-on bonuses offer a poor rate of return. For every $10,000 spent, only $2,800 in value is recouped in health care settings, which amounts to a 72% loss, she noted.

Clasp is aiming to flip the script by offering a structured model – akin to ROTC – for long-term care. The organization identifies nursing and therapy students early while they are still in school, funds their education through a $100 million pool of “impact capital” – socially-driven and philanthropic sources of capital with the expectation of financial profits – and integrates this with the federal and private student loan systems.

“We help you meet clinical talent when they’re in school. We remind them they’re doing something super mission driven, very special. We then fund their education,” Michaels said. “So we fund your future workforce. We are also integrated with all of the private and federal loan providers. So if you’re a nonprofit, you want them to get access to public student loan forgiveness – we will make sure that happens.”

Employees sign up for a multi-year work commitment, and only repay their student loans as they stay.

“They leave, your obligation stops. Your ROI is always positive,” Michaels said.

And so, providers like CarDon only pay off student loans as long as the worker remains part of the workforce.

The program boasts only 5% first-year turnover and a 99% graduation rate among Clasp supported students, which is far better than the industry averages. Turnover rates in the sector can range from 30% to 75%, Michaels said.

Clasp also uses social media tools like influencer partnerships and campus ambassador programs to engage Gen Z. Influencers share real stories about their debt and career choices, creating authentic, high-reach content. As an example, Michaels said one of the posts got 95,000 views in 48 hours. And these tactics help normalize early employer engagement and elevate nursing home employers who invest in students’ futures, she said.

The debt to loyalty model also motivates students to finish their degrees and fosters earlier, deeper connections between providers and future employees.

“We have some partners who have come down to the single digits [for turnover] with this tool, and it’s because if you incentivize people the right way, behaviors change,” Michaels said.