Job Seekers to Employers: Pay My Student Loans, Keep Your Paid Vacation
90% of respondents with debt said they think companies should offer student loan repayment as part of their benefits package, according to a survey of more than 5,000 job seekers by Beyond, a job search and application site. And one in 10 job seekers with debt ranked student loan repayment higher than paid vacation when asked what they thought was the “most important” company benefit.
40 million Americans hold $1.3 trillion in student loan deb. Right now just 3% of companies provide student loan repayment benefits, according to a 2015 survey of employers from the Society for Human Resource Management.
Tax and accounting giant PricewaterhouseCoopers announced last year that it would offer employees up to $1,200 a year for six years to put toward paying off their student loans. Investment firm, Natixis followed suit, announcing in December that it would give employees a total of $10,000 over the course of their career to help pay off their loans. Startups are even popping up to help employers better manage the perk.
Of course, all employees are paid based on their marginal value product, so this type of perk is somewhat gimmicky. The more money a firm devotes to loan repayment, the less money is available for other forms of compensation---like cash!
And here is the kicker, Unlike health insurance and 401(k) contributions there’s currently no preferential tax treatment for student loan help. That means borrowers would have to pay taxes on the perkt just like they would any other income.
Perhaps a savvy politician can propose to make such a benefit tax free.
Tax breaks are almost always good---especially when broad-based.