Company-Based Student Loan Paydown Benefits Plans
If you’re reading this post, then chances are good that you too are buried in excessive student loan debt.
That probably also means you’re somewhere between the ages of 22 to 40, that you’re working full-time, and that you are struggling to keep up with the mortgage payments (or more likely, rent), car payments, and everyday living expenses because of your crushing student loans.
Well, for the first time in a long time, I’ve got some good news to share!
The Student Loan Debt Crisis
All of us millenials are well-aware that the student loan debt crisis is a significant threat to the future of this country, but it seems like the media has just now caught onto that fact. Every day I’m seeing more student loan-related articles appearing on portals like Fox Business, the Huffington Post, CNN and other popular digital outlets.
And I can definitely appreciate the attention these portals are bringing to the issue; after all, the best way to enact change in the way that student loan debt is handled is to make everyone aware of the wider problem, so that solutions can be put forth to fix it!
However, while the Government lags behind (like usual), failing to readily embrace the issue and present a unified strategy that will actually help ALL BORROWERS (rather than the select few identified by President Obama’s Student Loan Forgiveness Program), it seems that private enterprise has decided to step in and fill the gap.
Student Loan Paydown Benefits?
We’re all familiar with the traditional benefits employers provide: healthcare, vacation time, sick leave, 401k matching, etc. But it appears that Millenials have a different idea of what types of benefits they should be receiving from the workplace: a study conducted by Ed Assist in April 2015 showed that 33% of Millenials expected their employers to help pay down their student loans!
Personally, I’d never heard of any student loan debt paydown programs being offered by employers, but I do absolutely love that idea.
While the Government has been extremely slow to address the growing college loan crisis, the workplace appears poised to tackle the problem in one of the best ways possible – not via handouts and taxable forgiveness programs, but with actual debt relief!
Gradifi’s Student Loan Paydown Plan (SLP)
Gradifi (pronounced “Grad-if-eye”) is a Boston-based startup with a great idea – their Student Loan Paydown Plan (or “SLP”) is the first company I’m aware of that’s brought a student loan paydown benefit to the table, and they’ve already had over 100 companies sign up to offer this benefit to their employees beginning in 2016.
Apparently, the first company to pilot their program was PricewaterhouseCoopers (PwC), who’s now offering the SLP program to thousands of employees, including over 11,000 recent graduates recruited by the firm each year.
As the job market continues to improve, businesses will be forced to work harder to attract and retain valuable talent, which is exactly why Gradifi is entering the market at just the right time.
Why Would Employers Offer Student Loan Payment Plans?
There’s no question as to who this new benefit is targeted at; they’re the same people that each new startup (but also the traditional Fortune 500’s) seeks to attract and retain: Millenials!
And now that outstanding student debt has topped the $1 Trillion mark, could there possibly be any more important issue to Millenials? Not according to me or my readers.
Fortunately, Gradifi’s thinking outside the box and stepping in to help these companies fill the void left by traditional benefits packages, and they’re even offering three different ways for employers to help with employee’s student loans, including:
Gradifi’s Three SLP Benefits Packages
- The Employer offers to contribute a fixed amount of money to the employee’s student loan debt each month, with a significant increase coming after 12 months of service have been completed.
- The Employer offers something like a traditional matching program, matching employee contributions toward paying down their debt.
- The Employer offers to pay a fixed rate value toward the employee’s student loans each month, which does not increase after any milestones in service.
There’s some flexibility within these offerings too, though, as company’s can choose who they’ll offer these benefits packages to (perhaps only to recent graduates, new employees, management employees, long-standing employees, etc.), which increases the odds that Gradifi’s solution will work for virtually any situation (including those with graduate degrees or other advanced diplomas, like JD’s, MD’s, PhD’s, etc.)
Will It Catch On?
If we’re lucky, more and more employers will enroll in programs like Gradifi’s, and we’ll see significant improvement in access to student loan debt forgiveness benefits for everyday Americans.
This type of benefits package may end up being far more attractive for new graduates (and recent graduates) than the traditional health insurance and 401k, so I wouldn’t be surprised to see major offerings from any companies or corporations looking to attract young talent.
I’d be especially surprised not to see the big tech firms like Apple, Google and Facebook leading the way here.
By: Tim Marshall
Tim's experience struggling with crushing student loan debt led him to create the website Forget Student Loan Debt in 2011, where he offers advice, tips and tricks for paying off student loans as quickly and affordably as possible.