Student loans payments are like flossing your teeth; you know you should do it (or, in this case, pay it) more often, but you’d rather just do the bare minimum each and every month, knowing you’ve got time to wipe all of your student debt out. Problem is, there’s such a student loans crisis in the United States that many 20-to-30-somethings are having a tough time even making a dent in the balance, instead, willing to pay minimums each month.
According to ticas.com, it’s believed that nearly 70 percent of college graduates have college debt, meaning they’ve got plenty of student loans payments they’re responsible to make each month. With the average college graduate leaving school with as much as $30,000 in student loan debt, and another 20 percent owing more than $100,000, it’s believed that Americans are in more debt from student loans than credit cards.
For those looking to expedite the process of relieving college debt and want assistance in making student loans payments, there’s an untraditional outlet willing to help — your employer. That’s right, with so many college graduates and employees buried in debt, a few companies are offering employees student loans assistance, with the offer being well-received by people, per a recent CNBC poll asking employees about the topic.
In the aforementioned CNBC article, John Samaan, senior vice president and head of human resources at Millennium Trust Company, mentions that the company began offering student loans payment assistance to employees a few months ago. The response? Nearly 20 percent of Millennium Trust Company’s 300 employees are enrolled in the program. He also added that adding the student debt relief program as a benefit has even led to more talent interested in the the company, per CNBC:
“We got a lot more inquiries from potential candidates,” Samaan said. “People want to join us to be able to participate in this program.”
Although there are some companies who are progressively thinking about assisting employees with their student loans payments, it still has a long way to go before becoming the norm. That’s because, according to the Society for Human Resource Management, per the CNBC piece, only about 4 percent of companies are providing such a program.
So, is there a benefit to working for a company who offers student loans payment assistance? When crunching the numbers, yes! For example, an employee with student loan debt of $53,000 on a 10-year repayment term at 4 percent interest rate would pay off the overall balance three years earlier if an employer provided $200/month as assistance. That’s a major difference.
Companies don’t receive any type of tax deductions for such student loans payment programs — which may be one of the reasons more employers don’t offer one — but there are discussions in Congress about making this a tax-free benefit, thanks to the Employer Participation in Student Loan Assistance Act. Given the amount of employees in need of student loans debt relief and the reception to having an employer assist in payments, only time will tell if this becomes more of the norm, but it’s a good start educating companies about the student debt crisis in America right now.
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