Companies offer to cover student loans
Companies are finding that making it easier for workers to repay their student loans helps you to bring and keep a a work force that is happy when companies offer to cover student loans.
More and more businesses are helping workers refinance their debts giving additional cash for loan payments to employees, as well as paying their workers’ lenders. It is an important advantage for millennials — individuals 35 and under — who are fighting as they enter the work force to pay 1000s of dollars in student debt.
That is never as easy as it seems: Many school grads wind up owing multiple lenders, and the tax consequences may be challenging. Companies also need to ensure the cash would go to the proper location. Only 3 percent of student loans were repaid by workers a year ago after their employers offered assistance, based on a survey of more than 460 human resource supervisors performed by the Society for Human Resource Management.
But are beginning to offer it, including some big name firms.
Starting in July, New York-based accounting firm PricewaterhouseCoopers intends to give certain workers with student loan debt year for up a just as much as $1,200
It does not cost Redmond, Washington- but SoFi says the lender to provide lower rates for their workers is paid by some of its 200 customers.
Companies say they are told by workers their debts make it impossible to purchase a property or to save for retirement.
“Millennials are being destroyed by student debt,” said Michael Fenlon, the worldwide talent leader at PricewaterhouseCoopers.
Because millennials surpassed Generation X to end up being the biggest cohort in the work force a year ago, as stated by the Pew Research Center that matters, as well as their choices are improving together with the job market. The vast majority say their capability to cover student loans would influence if work is taken by them, in accordance with a survey from the American Student Assistance, a non-profit that helps borrowers manage their student debt.
Workers must analyze the advantages attentively. If refinancing, they need to make sure that the terms are not worse than that which they are currently paying. People that have federal loans may lose perks and protections by changing to other lenders. And loan payments — like cash — are now taxable as income.
That could change. The Company Involvement in Student Loan Assistance Act, for instance, proposes making up to $5,250 in payments annually for student loan debts tax free for the employee, and eligible for tax breaks for the company.