Companies are discovering a way to bring in more applicants and keep their workforce happier. The solution: Helping workers repay their student loans.
More and more businesses are helping workers refinance their debts by giving them additional cash for loan payments, as well as paying their off lenders. It is an important advantage for millennials -- individuals 35 and under -- to pay off their thousands of dollars of outstanding student debts, especially as they are entering the workforce. The government also offers various federal student loan forgiveness programs that can help them pay off their debt.
That is never as easy as it seems: Many school grads often end up owing multiple lenders and accruing tax consequences along the way.
Big-Name Firms Paying Off Student Debt
Companies also need to ensure this cash goes to the proper location. Only 3 percent of companies helped its workers repay student loans in 2016, based on a survey of more than 460 human resource supervisors performed by the Society for Human Resource Management. But as big-name firms, such as New York-based accounting firm PricewaterhouseCoopers beginning to offer it, more and more companies will start to offer this incentive.
PricewaterhouseCoopers, for example, intends to give certain workers up to $1,200 a year to help pay off their student loan debt. These companies are told by workers that their student debts make it impossible to purchase property or save for retirement.
"Millennials are being destroyed by student debt," said Michael Fenlon, the worldwide talent leader at PricewaterhouseCoopers, which enlisted a startup, Gradifi, to manage the newest advantage.
Others, including Credible SoFi and CommonBond, empower businesses to simply help refinance their workers' student debts with payment plans and more wieldy rates. EdAssist, which has managed tuition payment benefits for companies for approximately nine years, started offering student loan repayments last year.
What Are Millennials Saying About Student Debt?
Millennials surpassed Generation X as being the biggest cohort in the workforce in 2015, as stated by the Pew Research Center. Their choices are improving together with the ever-changing job market. The vast majority say their capability to cover student loans influence their work decisions, in accordance with a survey from the American Student Assistance, a non-profit that helps borrowers manage their student debt.
Lin pays about $150 on ChowNow processors in a different percent, and her debts monthly, about $40. The LA-based firm, which powers program ordering for restaurants and online merchants, intends to raise that, and now pays up to $500 per year per worker
"It is more challenging to hire excellent gift, and this is just another excellent instrument to do this," said Christopher Webb, the CEO of ChowNow, which uses Tuition.io to manage the advantage.
Workers must analyze the advantages attentively. If refinancing, they need to make sure that the terms are not worse than that which they currently pay. People that have national or federal loans may lose perks and protections by changing to other lenders. Also note that loan payments -- like cash -- are now taxable as income.
That could alter in the upcoming year. The Company Involvement in Student Loan Assistance Act, for instance, proposes making up to $5,250 payments for student loan debts tax-free for the worker, and eligible for tax breaks for the company.
With more companies now offering to help pay off student debt, millennials now have more options to lower that ever growing number on their finances. If you have recently taken out a federal student loan, you may qualify for the student loan forgiveness program. Learn more about Federal Student Loan Programs or contact us to speak to one of our senior consultants about your situation. Satisfaction Guaranteed!