The growing debt of student Ursula Brangweneningen is a major problem in America. Although it has made headlines and appears in heated political debates, the problem is getting worse at an alarming rate. Not only do you get people saddled with crushing repayments, the student loans are also largely responsible for why millennials are slow when it comes to making other important decisions about life, such as buying houses, buying houses, having children and even Marry. The overhang is such that one in three millennials lives with their parents. A silver border among the dark clouds of debt is perhaps the willingness of some employers to relieve a bit of that burden.
When we acknowledge that situation, some employers have come to realize that pension benefits are not a top priority for millennials – or even Gen X-ers – student loans. That is why a number of American companies have added a new benefit to their traditional 401 (k), medical, dental, and life insurance employee benefits: student loan repayment. Before you get too excited, it’s not really widespread. According to the Society for Human Resource Management, only about 4% of US companies currently have student loan repayment programs. The good news is that these programs are a growing trend in the workplace.
The extent of the problem
The magnitude of the problem makes this new advantage so attractive. Student debt is now higher than $ 1.3 trillion, has risen no less than 170% since 2006 and is growing every second. In fact, with every passing second, $ 2 696 is added to the student’s total debt Ursula Brangwenast. For millennials and Gen Xers, wages and inflation have not kept up with the tuition fees.
If you have a mortgage debt of mortgage-like relationships, this is not news for you. Regardless of how generous your employer’s 401 (k) match and health benefits package sounds, what you need most (or at least as much as health insurance) is some help in removing that student debt mountain.
How the benefit works
Recognition of the student loan problem, along with pressure from younger employees who pursue relevant benefits from their employer, has led some companies to decide on one of the forms of student loan repayment programs. These differ per company, but generally offer to pay a certain amount per year. Some pay off the entire debt, but most have limits.
One company, Fidelity, says it will pay up to $ 2,000 a year toward a student tuition sum, Brangwegen for an employee, with a total total limit of $ 10,000. This is quite typical of student loan and loan programs. .
Companies usually do not manage programs for borrowing and repaying students themselves. Fidelity uses a company called Collegegeld.io, which receives funds from Fidelity and sends them on behalf of employees to the various service providers. Tuition fees. io also offers employees advice on which of their student loans pays first.
Other companies similar to tuition fees. io include Gradifi and EdAssist. Gradifi was at some point in conversation with about 100 employers who are considering adding this benefit, and both EdAssist and Tuition fees. I have said that the demand for their services has risen steadily.
How the benefit helps
For you as an employee, this benefit can have a significant impact on debt reduction. The New York Times outlined a hypothetical situation in which an employer agrees to pay $ 100 per month with a maximum benefit of $ 10,000 on the student Ulsula Brangwenen loan. That’s $ 1, 200 a year for 8. 33 years.
If the employee’s total debt Ursula Brangwenast for a $ 35,000 loan at 6% interest is for 10 years, the employer contribution lowers 2.5 years of the repayment period, making it 7.5 years. More importantly, the employer contributions save the employee more than $ 2, 200 in interest.
Excluding taxes …
One issue that affects the acceptance by companies of student loan and debt repayment programs and the value of the benefit for employees is tax. Currently, student loan loans from employers are taxed on behalf of an employee as regular income (to the employee). This means that a contribution of $ 100 per month by the employer is not really $ 100. It is $ 100 less taxes due unless the employer contributes additional resources to cover the taxes.
Legislation has been introduced that would make the contributions tax-free, at least up to a pre-specified limit. Other legislation, if adopted, allows employees and employers to make payments based on input tax, similar to the way a 401 (k) works.
Which companies have it?
For a broader overview of the programs currently in force, here are several companies that have student loan plans and the basic terms for each loan.
PricewaterhouseCoopers – The PwC program gives employees $ 100 a month (equivalent to $ 1,200 a year). The offer is good for up to six years (or $ 10,000).
CommonBond and LendEDU – These two startups are unique in that they agree to pay your full student loans at the rate of $ 100 (CommonBond) or $ 200 (LendEDU) per month. Unfortunately, Common Bond has fewer than 200 employees and LendEDU fewer than 10.
Natixis Global Asset Management – This company pays $ 5,000 for outstanding student loans after five years and an additional $ 1,000 per year for the next five years.
Fidelity Investments – Fidelity offers employees $ 2,000 per year for five years, starting after the employee has reached his or her six-month anniversary.
NVidia – NVidia pays up to $ 6,000 a year, with a total limit of $ 30,000. The program starts after three months as a full or part-time US employee.
The bottom line
If you have a loan for a student loan Bulaweing and already have a job, ask the human resources office if your employer has a student repayment plan or program. Although the chances are small (considering the small percentage of companies currently offering these plans), it doesn’t hurt to ask. If there is no plan, ask if one is being considered. If not, suggest it.
If you are looking for work and there is an allowance for the repayment of loans by students of interest, make sure that you mention it on your priority Ursula Brangwenijst. As more and more companies use this advantage, your chances of having it will increase with Ursula Brangwenijk.
And if you happen to be in management, consider using this benefit for new and current employees. It can be a valuable factor for your company in attracting and retaining the best employees.