The Best Benefit: Companies Help With Student Loans

In a bid to lure in millennial talent, many companies are finding out that the best benefit you can offer is to pay off your new hires is help with student loans. Price Waterhouse Coopers made a big splash in Atlantic magazine with the announcement that they will be helping associate level employees with student loan debt beginning in mid-2016. The new benefit is called Gradifi, a Boston-based startup that recognized 75 percent of graduates are coming out of college with their degree and significant debt. The contributions towards paying down the debt might not be the fanciest perk, but it is certainly one of the most in demand.

The Associated Press notes that other employers help young employees to refinance their student loans, and some companies will pay $5,000 or more towards knocking down that tuition. At the moment only about three percent of United States employers offer the benefit, however with more millennials entering the workforce this is a benefit that is bound to catch on. Companies are already competing for new talent as the Baby Boomers move inexorably closer to retirement. The drawback is that these contributions can be taxed as income, unlike contributions to your 401(k). However, there are bills currently pending in Congress that could exempt these contributions from federal income taxes.

• HR3861 would exclude up to $5,250 per year in educational assistance or student loan repayment.
• HR1713 would allow employees to receive up to $6,000 per year to a lifetime maximum of $50,000 tax-free.
• HR4363 would exclude up to $10,000 per year of these contributions from taxable income.
• HR4102 would exclude employer payments on refinanced loans without a yearly or lifetime cap.

Student loan forgiveness plans are already established in certain public service positions, such as healthcare, teaching, and social services. However, the private sector seems to be catching on somewhat belatedly. Certainly recruiting talent, more than human resources, requires something a little more than 401(k) matching in order to ensure not only recruitment but retaining workers. This is a big switch from the recession era policy of cutting benefits, stagnating pay, and wringing the workforce for every drop of productivity possible. Millennials are on track to become the largest generation represented in the workforce, exceeding even Generation X, so it order to retain talent employers must to some extent dance to their tune.

No matter how much debt you’re in, and how much stress you’re feeling as a result, you don’t need to be an associate at Price Waterhouse Coopers in order to start getting a grip on your debt. Van Horn Law Group specializes in helping graduates tame their debt to something manageable, payable, and reasonable. We would like to work with you in order to help you get those loans in line and avoid pitfalls such as wage garnishment or even losing your tax refund to repay your federal student loans. Give us a call and we will set up a free consultation to show you what we can do to help.