- About 8% of employers offered student loan repayment assistance in 2019
- Some employers offer monthly payments, and others one-time lump sums payments that can be used to pay down private or federal loans.
Between trying to save for retirement, a house, afford rent (or a house), and pay your daily expenses, life has gotten quite expensive. This is without even adding student loans.
By now you’re probably aware that our nation is facing a historic student loan record. In fact, did you know that almost 70% of college graduates with a bachelor’s degree took on debt in order to earn a degree and the average amount is nearly $40,000. Mind you, this is for an undergrad degree, it gets even worse for graduate students, this group borrow $100,000 or more on average just to be able to afford advanced degrees! No wonder it’s so hard to save.
What the Government is Trying to Do About It
You know, the situation has gotten so out of hand that the government is actually trying to do something about it. Enter the new Student Loan Assistance Act (aka H.R. 3861). Basically this law revises the tax law to prevent workers from getting taxed on any employer-sponsored student loan repayment plans. Now that’s a bill we definitely back.
Under this legislation, employers can contribute up to $5,250 tax-free annually to employees’ student loan debt repayments. Companies could already get this tax break for employer-paid tuition reimbursements, but the new bill expanded the coverage of existing tax codes to include student loan debt repayment.
Right on for the government to do so. With stagnant wages and rising cost of living, many young people face a lot of stress from can barely afford the day to day expenses of life.
What Your Employer is Doing About It
To aid with this, a small but growing number of employers are stepping in to help. According to a recent survey, about 8% of employers offer student loan repayment assistance in 2019. That’s up from 4% in 2018 and 3% in 2015. Hopefully in the coming years, student loan repayment assistance will be as common of a perk as vacation time, 401k plans and health insurance.
How Employer-Sponsored Loan Repayment Work
Some employers offer monthly payments, and others one-time lump sums payments that can be used to pay down private or federal loans. Some companies design their benefit a matching contribution. In this case, you need to check whether they have to continue making your own payments in order to receive it. The benefit can be restricted in other ways, for example stipulating that you need to have graduated after a certain year.
The benefit is almost always tied to your current student debt and cannot be applied retroactively. That means if you’ve already paid off your debt, then you can’t take advantage of it.
Employers format repayment assistance in a variety of ways. Some offer a match of employee payments while others offer a flat contribution amount, both up to a threshold.
Now that we’ve gotten that out of the way, here are some companies that assist in student loan repayment
- 1. Fidelity
Introduced in 2016, Fidelity Investments’ assistance plan ensures that employees at the manager level and below are eligible to receive up to $2,000 per year (up to $10,000 total over the course of 5 years) toward repayment of their student loans. The Step Ahead Student Loan Assistance benefit also provides employees with online tools to help them better manage their student loan debt. A benefit of this plan is that since the student loan benefit is paid monthly, an employee who leaves Fidelity does not have to repay the benefit. And remember, while Fidelity might be a financial services firm, they have plenty of job postings across a variety of fields.
Healthcare company Aetna (parented by CVS Health) offers full-time and part-time employees both tuition reimbursements and student loan repayment. Aetna’s student loan repayment program matches part-time employee student loan payments up to $1,000 per year with a lifetime maximum of $5,000. For full-time employees, Aetna matches student loan payments up to $2,000 per year with a lifetime maximum of $10,000.
- 3. Chegg
The education and technology company offers both full-time and part-time employees up to $1,000 annually to help repay their student loans. There is no cap on the amount of student loan repayment that employees can receive.
More recently, Chegg launched a new program called Equity for Education. The program benefit applies to any Chegg US employee with student debt, irrespective of whether they attended a 2- or 4-year college, or ultimately graduated. Under the new Chegg program, entry level employees through manager level, who have at least two years tenure at Chegg will receive up to $5,000 annually. Employees at the Director or Vice-President level are eligible for up to $3,000 annually.
- 4. Penguin Random House
Penguin Random House is the first book publishing company to offer student loan repayment assistance and promises to pay $1,200 per year (up to $9,000) in student loan repayment benefits for any full-time employee who has worked at the company at least one year.
- 5. PricewaterhouseCoopers (PwC)
Through its Student Loan Paydown benefit, PwC, the global accounting and consulting firm offers associates and senior associates up to $1,200 per year up to $7,200 toward an employee’s student loan debt. Over time, this may help to reduce student loan principal and interest obligations by as much as $10,000, and shorten loan payoff by up to three years.
- 6. Abbott Laboratories
Abbott Laboratories, a medical devices company, launched its Freedom 2 Save program to help part-time and full-time employees meet the dual challenges of needing to pay down debt and save for retirement.
Under the program, employees must show that they are paying 2% of their salary toward student debt repayment and, in exchange, Abbot will contribute a 5% “match” deposited into their 401(k) plans, without any 401(k) contribution of their own.
It gets better! In practical terms, that means participating employees could have $54,000 in their 401(k) plans after 10 years they wouldn’t otherwise have. That’s assuming a starting salary of $70,000, 3% merit increases each year and an average market return of 6%. By the time those employees retire, that contribution could likely be worth hundreds of thousands of dollars.
- 7. Nvidia
This might be the company offering the most yet. Nvidia, the technology company offers its full-time and part-time employees up to $6,000 per year (up to $30,000!!!) in student loan repayment benefits. Each month, Nvidia will pay the lesser of $500 and the employee’s required total monthly student loan payment amount. To be eligible, employees must work at the company for at least three months and have graduated within the last three years.
- 8. First Republic
The private bank and wealth management company provides its employees with a tiered student loan repayment benefit. The student loan repayment benefit is $1,200 the first year of employment, $1,800 the second year and $2,400 in all subsequent years. There is no lifetime cap on the student loan repayment benefit. Both full-time and part-time employees are eligible, as are employees who have borrowed an educational loan on behalf of their child.
- 9. Live Nation
Live Nation, the entertainment events promoter and venue operator, offers its employees $100 per month to repay their student loans, with a total benefit of $6,000 in student loan repayment.
Staples’ program provides eligible employees will receive $100 a month for three years, for a total of $3,600. The eligible workers can be paying off a degree they’ve already finished or currently enrolled at an accredited college.
- 11. Estée Lauder Companies
Estée Lauder offers its U.S. employees who have been at the company at least a year $100 a month toward their student loans, up to $10,000 total. It launched the program in 2017 and nearly 1,000 people have signed up; about 80% are millennials.
- 12. Hulu
Streaming service Hulu launched a student loan assistance program last year that includes monthly payments to a lender, as well as resources to help students find the most efficient way to pay off their loans. Hulu pays up to $1,200 a year per employee to match their student loan payments.
- 13. CommonBond
CommonBond, a finance company, assist employees with $100 a month paid directly to the student loan servicer, and there are no lifetime caps.
- 14. SoFi
SoFi might be known for lending money, but the personal finance company now offers its own employees $200 a month toward workers’ student loan debt, with no lifetime cap.
- 15. Freddie Mac
Freddie Mac, the giant mortgage lender, provides eligible employees contributions totaling up to $9,000 over a five-year period to help them pay down their student loans. In order to qualify, a student loan repayment assistance, the loan must be must be: GraduatePLUS loans, co-signed loans, loans used towards an incomplete educational degree, loans consolidated with a spouse, loans that are eligible but are combined with ineligible loans within the same account, educational lines of credit, loans in default, collections, forbearance, or grace period, or loans that have already been (or intend to be) reimbursed through a separate tuition reimbursement program.
- 16. Natixis
This corporate and investment banking company offers $1,000 a year to all employees with any federal or private student loans, up to a maximum of $10,000 over a 10-year period. Employees receive a $5,000 lump sum after their five year-work anniversary and $1,000 a year for the next five years.