Debt is a constant in the life of every American. For most, going to college meant borrowing thousands of dollars. The expectation is, once they get a job, they will pay off their debt.
Unfortunately, it is easier said than done. Collectively, 44 million Americans are weighed down by $1.7 trillion student debt that is yet to be paid. There are plenty of factors in play that make it harder for people to return the money they owe. The nation’s high unemployment rate, the rising cost of living, stagnant wages, and more put people into a cycle of debt that they cannot get out of.
The inability to pay off student debt is financially crushing. Missing payment deadlines is considered delinquency which will cause your entire credit rating to take a nosedive. When your credit rating is bad, you will not have access to many financial products and services. Any application for a mortgage, credit card, and others will be denied. Future employers might also look at your credit rating and see it as a red flag. The non-payment of your student debt will significantly impact your life.
Delinquency is a huge problem. Lenders know very well the consequences of non-payments. Technology firms like loanpaymentpro.com have made it easier for borrowers to receive funds and pay their dues digitally. The service provides lenders a platform to efficiently disburse money and accept payments. The company claims that it can increase the payment acceptance rate by 35 percent.
But, employers should be doing more to help employees pay off their student debts. Debt creates stress that can prevent a person from becoming productive. Moreover, now that the “great resignation” is happening across the United States, paying off student loans is an additional perk that will encourage employees to stay and attract new talent.
According to the Employee Benefit Research Institute, only 17 percent of employers have a program to aid employees in paying off student loan debt. Meanwhile, 31 percent of companies plan to offer it as a perk in the future.
Here are some companies that help employees clear their student debts.
1. Abbott Laboratories
Abbott Laboratories offers a unique and generous program to assist employees in paying off their student loans.
Typically, when a company has a 401(k) program, the employee agrees to direct a percentage of their paycheck into an investment account. The company matches part of or the entire contribution.
However, in the case of Abbott Laboratories, the healthcare research firm contributes five percent of the employee’s pay into their 401(k). The firm will continue doing this as long as the employee dedicates two percent of their paycheck to paying off their college debt.
The program is so effective that 1,000 employees of Abbott out of 29,000 have signed up to it. Other companies are copying and launching their own similar programs.
NVIDIA is a technology company best known for inventing the graphics processing unit (GPU).
To recruit some of the best minds in the industry, the company has an offer: part-time and full-time employees in the U.S. who are qualified can apply for a reimbursement of their student loans. To pay their debt, they can get up to $6,000 a year, or a maximum of $30,000 over five years.
3. Connelly Partners
Connelly Partners, a marketing company, offers a $1,000 that will go toward repayment of college debt to every new employee that comes on board. The perks do not end there. The company has partnered with Gradifi, a firm that was specifically created to help employers launch student loan assistance programs. With the help of Gradifi, Connelly Partners is giving employees an additional $100 per month that will be used to pay off student loans.
After five years in the company, employees of Connelly Partners are also entitled to another $1,000 bonus for their student loan repayment.
Chegg is an EdTech (educational technology) company. It knows the importance of education and the struggles that people go through to get it. That is why, as part of its employee-benefit package, the company offers employees shares in stock to aid them as they pay off their college debt financially.
From entry- to manager-level, most employees who have been working for the company for at least two years can get up to $5,000 annually. Meanwhile, director- and vice-president-level workers get up to $3,000 every year.
Debt that people accrued to go to college and gain quality education has led to a crisis that weighs down millions of Americans. Thankfully, more companies are stepping in to help free their employees from crushing student loan debt.