Fidelity Investments has thrown their hat in the ring of offering Employer-based Student Loan Forgiveness Benefits, announcing Thursday, September 14th, 2017 that one of their new products will offer employers the option of giving employees substantial student loan repayment benefits.
I would hope, though there’s no official indication of this yet, that Fidelity is going to offer this same benefits package to their own employees… but that remains to be seen.
Dubbed the Fidelity Student Debt Employer Contribution program, this system is described as an “after-tax contribution that employers can make towards student loans to help employees pay off undergraduate or graduate loans more quickly”.
Why is Fidelity Introducing this Program?
And there’s good reason for employers to take notice, considering everyone’s scrambling to attract the top talent from a population saddled with excessive loans, including $1.4 trillion dollars in total outstanding student loans, and an average debt load of $37,172 for graduates from the Class of 2016.
Fidelity reports that their surveys show 86% of young workers would commit to their employer for a five year term of service in return for help paying off their student loans, so any company looking to retain their millennial employees should definitely consider leveraging this new program.
The Fidelity Student Debt Employer Contribution program will be piloted the end of 2017 (Q4), and if all goes well, is supposed to see a full rollout during the beginning months of 2018.
Check Back Regularly For Updates
As usual, I’ll be monitoring the growth of this program closely, especially since I’ve got a feeling that the Federal Student Loan Forgiveness Benefits are about to see some serious cuts thanks to our despicable Education Secretary Betsy DeVos (who’s declared war on the CFPB, tried to cancel the Public Service Loan Forgiveness Program, and end the Borrower’s Defense to Repayment Program) and President Trump’s student loan reform plan, which looks to be destroying all the best benefit programs and replacing them with… absolutely nothing.
Fortunately, big financial firms like Fidelity offering these sorts of benefits packages to employers may be able to fill the gap left by the Federal Government’s abandonment of financial support for recent graduates, and perhaps Employer Based Student Loan Forgiveness and Repayment Plans will be the new millennium’s answer to the 401k plans of the 20th century.
That, remains to be seen, but I’ve got a pretty strong feeling that whatever employer takes the reigns on this thing first is going to attract a ton of millennial talent, and any who aren’t providing student loan benefits to their employees are going to have trouble retaining the generation of kids now graduating with nearly $40,000 in debt.
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