Which Employers Are Helping Millennials Repay Their Student Loans?
While Gen X and Boomers often considered pension plans, 401(k)’s, and health insurance among the most important benefits when choosing a job, millennial employees are looking for companies with student loan repayment programs.
Today’s employment landscape resulted from a crippling student debt crisis: $37,172 on average, for a 2016 graduate. Knowing this, it’s no surprise that, in a 2015 Iontuition survey, 80% of respondents said they would like to work for a company that offers student loan repayment assistance. In addition, about half of respondents said they’d prefer the help with their student loans over 401(k) contributions.
Is This A Bleeding Edge Benefit?
There are only a handful of companies offering this benefit, making it a new trend among company perks. According to a 2016 study by the Society of Human Resource Management, only 4% of companies are currently offering student loan repayment assistance, up from 3% in 2015.
Part of the reason employers have been slow on the uptake is because currently the benefit is treated as taxable income. To the employee, the benefit is no better or worse than a bonus with a label, ‘student loans’ affixed.
This could be changing, as there is legislation in the works to make this benefit more favorable from a tax standpoint. If legislation allowed student loan benefit programs to be more advantageous, we should expect more companies to following the lead of the chosen few who offer it.
What Do Millennials Think Of It?
“Internally, we couldn’t have signed up fast enough,” shared Amanda Danner, Corporate Actions Analyst at Fidelity Investments. “It was great to feel our voices were heard and our needs considered. Externally, my friends and peers keep asking, ‘Are you hiring?’ at the mere mention of the program.”
From a recruiting perspective, companies that include a student loan repayment program will be on many millennial hot company lists. Recent graduates can see this benefit as more than just another perk. They see it as an aid to reaching future financial goals such as buying a house, saving for retirement, or pursuing further education.
Further, if a company is worried about their millennials hopping jobs, the student loan repayment program may deter any employee with a wandering eye and heavy debt.
“The student loan repayment benefit is just another incentive to stay with the company and do good work,” said Gabriella Lilienthal, a Talent Development Associate at Aetna. “I know that if I stay for five years, I will be able to reap the entirety of this benefit will really motivate me. I will be able to save in the meantime and have one third of my student loans paid. This is just icing on top of the cake of being employed at Aetna AET +0.36%. It makes me want to invest more into the company because they are choosing to invest in me.”
Which Companies Offer Student Loan Repayment Benefits?
Here are 12 companies currently offering student loan repayment plans:
CommonBond, a student loan refinancing and consolidation company, offers up to $100 per month, or $1,200 per year, towards employee student loan payments until the loan is fully paid off, as long as the person is employed at Commonbond.
Powertex, a design company, offers up to $100 per month to employees for up to six years.
NVidia, a visual computing technology company, offers up to $500 per month, or $6,000 per year, with a limit of $30,000 total to employees.
Aetna, one of the nation’s leading health care benefits companies, will match up to $2,000 per year for full-time employees, with a limit of $10,000 total.
Pricewaterhouse Coopers, an audit and assurance, tax and consulting services company, offers $1,200 per year for employees with 1-6 years of tenure, to a total limit of $10,000.
Fidelity Investments, a diversified financial services company, offers $2,000 per year to employees after six months of employment, with a limit of $10,000 total.
SoFi, a loan refinancing company, offers $200 per month to employees toward student loan payments.
Natixis Global Asset Management, an investment firm group, recently updated their student loan benefit, removing any tenure requirement. They now offer $1,000 per year upon beginning employment, with a $10,000 total limit.
LendEDU, a student loan refinancing and consolidation company, offers up to $200 per month, or $2,400 per year, to employees with student loan debt.
Chegg, a textbook rental company, offers $1,000 per year to employees repaying student loans.
ChowNow, an online food ordering system and app company, offers an employer match to employee student loan contributions of up to $500 per year and is looking to increase that to $1,000 per year.
Kronos, a workforce management software company, offers $500 per year to employees repaying student loans.
Gradifi, a student loan payment platform, offers $250 per month, up to $10,000 total towards employee’s student loan payments.
I would expect this list to grow through 2017 as other companies realize the recruiting and retention gains they can see through a student loan repayment program. Millennials should be on the lookout for companies that offer this benefit and asking their employer if they will consider adding it in the future.