When you’re interviewing for jobs, one of the things to look at is the company’s benefits. Sometimes things like health insurance, retirement options, and other perks can mean almost as much as base salary. Employers know that, so some companies are offering some pretty interesting benefits to their employees. From gym memberships to being able to bring your dog to work, companies realize that the better the perks, the easier it is to bring in solid talent.
Some employers are even going so far as to offer student loan repayment as an employee benefit. In fact, according to Forbes, it’s the hottest new trend in employment perks, especially for millennials, who are graduating with more and more student loan debt hanging over their heads.
Only 4 percent of companies currently offer to repay their employees’ student loans in any form, but that number is rising as companies realize how effective a tool it is for recruiting and retaining high-quality workers.
How Does it Work?
The amount you can get – and the specific program setup – differs by company. Some, like computer graphics card manufacturer Nvidia, will pay either $500 or your monthly student loan payment, whichever is less, up to $6,000 per year and $30,000 total. That not only means Nvidia will make student loan payments for their employees every month, but also means there’s a good chance there will be next to nothing left of the balance by the time the $30,000 ceiling is reached.
Other companies aren’t quite so generous, but they’re still making a massive dent in employee student loan debt. Financial services company Fidelity offers $2,000 per year paid directly to the lender, up to $10,000 total. Even better, Fidelity employees receiving the benefit who then leave the company don’t have to pay that money back.
Other companies, such as insurance giant Aetna, offer a matching program in which they match the monthly payment the employee is already making. While it might seem less advantageous to still have to make that payment every month, the matching means you’re basically making double payments – getting the loan balance paid down much faster.
What's the Catch?
Each company has its own eligibility requirements. To qualify for employer repayment, most companies expect the employee to have been there for 3 months or up to a full year. Once you’ve met the time-in-job requirement, some companies also expect you to keep making payments, like Aetna above. Others pay out lump sums at the five-year mark instead of monthly payments, and still others may only pay out for a set amount of time or up to a monetary limit.
Regardless of the program, however, you’re responsible for taxes on the assistance; according to the federal government, that help is considered income, and Uncle Sam wants a cut. If you do manage to land one of those highly sought-after repayment programs, keep in mind that you might have a bit more deducted from your paycheck.Not many employers are currently doing student loan repayment benefits, but that might change as more and more companies see what an effective retention strategy it is.