As the job market continues to tighten, employers are facing stiff competition to attract and retain the best talent. To appeal to the droves of workers balancing student loan payments with other financial goals, a growing number of employers are offering to knock thousands of dollars off an employee’s student loan tab.
Investment bank Natixis Global Asset Management recently began rewarding employees who’ve been with the company for at least five years with $5,000 toward their federal student loans, with an additional $1,000 payment each year for up to five years. Others, including consulting firm PricewaterhouseCoopers, textbook rental company Chegg and online ordering platform ChowNow, have announced similar deals.
Details vary, including whether the programs cover graduate or private loans, for example. Contributions are considered taxable income, but Congress is considering a bill that would make them tax-free. Although few employers offered such programs in 2015, “we’ll see other large organizations, particularly within financial services and technology, offering this benefit in 2016,” says Bruce Elliott, manager of compensation and benefits at the Society for Human Resource Management.
The extra payments can help debt-burdened employees retire loans more quickly, shave interest costs and get started sooner on other financial goals. With the boss’s help, Charlie Donovan, 31, a regional director at Natixis in Boston, is whittling down loans that helped pay for a degree from Assumption College in Worcester, Mass. “That should uncover enough extra cash to beef up my children’s college funds or my retirement savings,” he says.