Once you graduate college, the new job of searching for career employment begins. When first starting out, you may not make much money and may not even be in your desired field, but over time, your career will advance, and higher level employment comes with not only higher pay, but some excellent benefits. Many employers are looking for recent grads to fill positions in their companies. These workers are well trained and ready to learn and can be an outstanding asset to their companies. Employers know that most recent graduates have student loan debt. In an attempt to attract the best applicants and retain them long term, some employers are now offering assistance with student loan payments as a new component of their benefits package.
How Does it Work?
When you’re hired for a full-time, benefited job, you’ll learn about your benefits package from the company’s Human Resources department. This typically includes medical, dental, and vision insurance, and may also include matching 401K contributions and life insurance, or even special perks like free parking or bus passes. If your company offers student loan payment assistance, it will usually either be a percentage of your monthly payment or a set monthly amount. Most companies will have a limit on the total they will pay, but every little bit helps. Companies may design their assistance programs however they’d like; some may require that you work for them a set amount of time before this benefit begins, while others may obligate you to stay employed by them for some length of time as a condition of using the benefit (otherwise, you’ll need to pay them back.)
As you consider this benefit, or even search for employers who specifically offer this perk, it’s important to be aware of the tax ramifications. Any money a company pays on your behalf toward student loans is considered taxable income, unlike matching 401K contributions. Still, if you have years of monthly payments of hundreds of dollars or a total balance of tens of thousands of dollars, this benefit could make handling living expenses easier and be too good to pass up. It can be a relief just to know that you have this added help and a better plan to pay off this debt.
Exciting New Trend
This new benefit is still not very common, with only 3% of companies offering student loan assistance. This is very rare among small companies, but more and more large companies that hire lots of recent college graduates are jumping on the trend to attract and retain the best applicants. Some employers also offer tuition assistance for college students, reducing the need for their employees to take out student loans in the first place. As more and more millennials enter the workforce, bringing nearly $1.3 trillion in student loan debt with them, this trend is bound to continue. While this assistance won’t completely eliminate student loans, it can make juggling life and other debts a little more manageable.