New Employee Perk Aims to Unburden Millennials
Graduate from high school. Go to college. Get a good job. — It’s the path that many of us are taught but it’s also one that has saddled many Millenials with huge amounts of student loan debt as the enter the workforce. In fact, as we recently mentioned, one financial adviser said the top question she’s asked by 20 and 30-something is if they’ll be paying off their student loans until they die. Because of this it seems only natural that employers would step up and offer their employees a perk that speaks directly to their concerns.
According to The Atlantic the accounting firm Pricewaterhouse Coopers (perhaps best known for tallying the Academy votes for the Oscars) recently began offering their employees assistance with their student debt. Under the new program that will launch sometime next year, associate-level employees will be eligible to receive $100 a month towards their student loans. The perk has a maximum length of six years which works out to $7,200. However, with interest accounted for the firm estimates the value of this offer is actually more like $10,000.
In a press release Todd Codd of Pricewaterhouse Coopers elaborated on the decision to offer the perk saying, “Student loan debt — driven by the rising cost of higher education — is a pain point for recent graduates. As a firm that recruits more than 11,000 new hires off campus each year, this is an opportunity to differentiate ourselves with a key talent group — Millennials — and provide a meaningful way to help reduce their debt.” Currently the total amount of student debt Americans hold is estimated at over $1 trillion dollars.
The program was created with Gradifi, a Boston-based start-up, which will collect information from participating employees about their loans so that they can make the perk payments directly to their account. While PwC was the first of their clients to enact the policy, the company says it has about 100 others who are interested in starting similar programs. Gradifi feels that perks like this will be an important tool for recruiting top talent out of school.
Some have compared the perk to the way many companies contribute to their employees’ retirement accounts. In both cases the employers are showing that they care about the concerns of their employees by helping to set them up for the future. Unfortunately one big difference is that employees participating in the student debt program will be taxed on the payments the company makes on their behalf.
There’s no denying that student debt is a huge concern for many graduates. With that in mind I’d expect we’ll see a lot more of this type of perk popping up to attract fresh Millennial talent. Even if $7,200 might not completely fix the problem, it’s certainly a welcome attempt to help.