Student loan debt — it’s an issue in the halls of academia across America, in the halls of power on Wall Street and even on the presidential campaign trail. However, few people ever stray beyond the talking points of “Debt bad; Degrees good!” and, as a result (or lack thereof), very little changes — except for debtors’ minimum payments and interest rates.
However, several white-collar employers have instituted their own solutions to solve the student debt crisis in America: repayment assistance for employees and applicants.
Fidelity became one of the first of a new rash of companies to do so on Tuesday (March 15) when it announced that its new “student loan assistance program” would provide up to $10,000 in repayment help for employees that had been at the company for at least six months. Assistance is capped at $2,000 per year, but that hasn’t stopped at least 5,000 Fidelity employees from signing up for the program.
According to Jennifer Hanson, head of associate experience and benefits at Fidelity, the concept of paying down employees’ student loans works from both a business and human perspective.
“As a financial services firm, this was really concerning to us,” Hanson told The Boston Globe. “We felt that providing a benefit like student loan repayment assistance helps us to address a very real financial concern that is impacting our employees directly.”
Hanson and Fidelity aren’t the only ones who’ve suddenly grown a conscience for the plight of their debt-laden, entry-level employees, though. PricewaterhouseCoopers will start handing out $100 every month to qualifying workers, while Natixis Global Asset Management is matching Fidelity’s repayment cap, according to The Atlantic.
Even if the world’s largest financial firms don’t have the best interests of their employees at heart, there’s still motive for both sides to want to make the best of the situation. For fresh-out-of-college millennials saddled with debt, it’s unwise to turn down financial assistance from any direction. For the businesses themselves, the addition of a perk that appeals to their immediate needs — as opposed to, say, building a retirement that’s still 40 or 50 years down the road — could help already sailing companies attract an even bigger share of the talent pool spilling out of America’s universities every spring.
In fact, companies might not even have to throw up big bucks to attract those millennial geniuses. A Facebook survey from January found that millennials have overwhelmingly favorable attitudes toward companies that offer student loan relief — to the tune of 80 percent saying they’d want to work for such a company. It’d be all kinds of naive to think that businesses have started handing out repayment cash without first realizing it was an investment into the hiring process.
But that voice in the back of skeptics heads telling them that nothing in life is free might end up being more right than wrong. According to Bloomberg, while millennial workers express solidarity in their love for student loan repayments, they still have to pay taxes on them. The money is still earmarked for debt repayment, and in some cases, the deposit bypasses workers’ personal bank accounts. But the effective salary bump of however many dollars still affects each employee’s tax rate. So, while some indebted employees may gladly take a higher tax rate to pay down their loans, others may not be making out on the deal quite so well.
Beggars can hardly be choosers, though, and while it may seem like a move of pure altruism on the part of America’s employers to assist those deep in debt to America’s universities, Bloomberg made sure to note that a bill is moving through the U.S. Congress that would give tax breaks to any employer who engages in repayment programs.
Millennials — in debt to their degrees and soon to be indebted to their colleagues in HR and AP.