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The Red Lobster Top Secret Student Loan Program



When you wait tables or tend bar at Red Lobster, “The best benefits in the industry 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, says that companies “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 healthcare 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 deeper into the Red Lobster student loan program, you learn why the company hasn’t commented. It’s fishy. 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’d talked to hadn’t 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 benefits 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.”

Loan Name Eligibility Interest Rates
Income-Based Repayment Plan? Loan Forgiveness? Interest deferred?
Wells Fargo
Collegiate Loan
For college students, no co-signer needed Variable:3.5 – 9.4 percent
Fixed: 6.99 and 11.99 percent
No No Yes
Sallie Mae College Loan For college students, no co-signer needed Variable: 2.25 – 9.3 percent Fixed: 5.74 – 11.85 percent No, but can sign up for interest-only “Graduated Repayment Period” No Yes
Direct PLUS Loan For parents seeking financial aid for children enrolled in
college or career school
Fixed rate (if taken out between 7/1/14 and 7/1/15): 7.21
Yes Yes Yes
Direct Subsidized Loan For college students with demonstrated financial need Fixed rate (if taken out between 7/1/14 and 7/1/15): 4.66 percent Yes Yes Yes
Federal Unsubsidized Loan For college students who have not demonstrated financial need Fixed rate (if taken out between 7/1/14 and 7/1/15): 6.21 percent Yes Yes No

Wells Fargo Educational Loan as compared to federal loans

While Elliot says that tuition assistance isn’t replacing health care as a job benefit, he has seen an increase in companies who offer the perk, since Starbucks and others have gone public with their programs.

Cohen agreed.

“We are dealing with a new workforce,” he said. “And with the ever-increasing cost associated with college, and people becoming very wary on spending money on something that might not help them down the road, the fact that organizations are providing these other kinds of opportunities …it’s a wonderful way to attract seemingly motivated people.”

But unlike Starbucks, which used its purchasing power to establish a much lower rate of tuition for its workers, Red Lobster doesn’t provide any type of tuition assistance exclusively for its employees.

“They’re being misleading in regards to branding that particular benefit,” Elliot said. “I would say it’s more of an educational referral loan program.”

He said it’s important to recognize that lying through omission doesn’t serve anybody, particularly in retail, where turnover cost is already high.

“You don’t want to lead a candidate on, because once you go through the expense and time to find the right employee, and then the employee leaves because you were less than honest with them, that’s not going to serve anybody,” he said. “At the end of the day, it’s going to cost the organization a lot more money. They will lose candidates that should add value to the organization.”

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