The Hechinger report recently reported on a trend that is becoming more prevalent. In addition to offering traditional 401-k’s etc. a growing number of employers are offering to help their employees become debt free and pay off their student loans. It is still only a small percentage of employers but the trend is growing fast as many students graduate with crushing debt loads. 42% of millenials have college debt and this has grown by 20% in just the past four years.
The loan repayment benefits can take different forms, and some are managed by third parties.
One such company, Tuition.io, debuted three years ago to help consumers manage their loans, and now handles student loans directly, working with employers to contribute $100 to $200 a month toward reducing employees’ debts. Its clients include Fidelity and Chegg.
Another company, Gradifi, which launched last year, offers a similar deal.
For now the contributions have been coming out of employers’ pockets. But as interest in the benefit grows, its adoption might be helped along by a little-noticed bill in Congress that, if passed, would allow companies to claim the benefit as a tax deduction.
Adding student-loan repayment as a benefit could help employees shave as much as three years off the lives of their loans and save $4,100 in interest, the financial services review company Nerdwallet found — and make recent graduates more confident about moving on with their lives.
This is a perk your students should be aware of and should be one thing they look for in an employer when they graduate from college. Here is a link to the Hechinger Reports article: http://hechingerreport.org/move-401ks-new-perk-helping-millennials-pay-off-college-loans/