Why More Companies are Offering Student Loan Repayment Programs

Why More Companies are Offering Student Loan Repayment Programs

Daniel Hall 06/05/2022
Why More Companies are Offering Student Loan Repayment Programs

Is anyone going to talk about the fact that big-name companies are now seriously exploring - or are already offering - refinance student loan programs?

The likes of Aetna, Google, Hulu, First Republic Bank, NVIDIA, Staples, Penguin Random House, and many others, are some of the progressive companies jumping on the bandwagon. 

And what a fun wagon ride it is for the employee! If you ask the average student about their worries for the future, student loan debt is always among the top three. How can they pay off such a monumental balance while going to school and working a nine-to-five job? 

The Government Is Listening to Students

Who Benefits from Canceling Student Loans

The answer may well be in government initiatives coming our way, which were put together to address the massive student debt problem in the United States. 

According to some statistical data, student debt has grown by 248% to a staggering $1.7 trillion. Besides mortgages, student debt is the number one type of debt. For that matter, many students are struggling to pay off their student loans past the age of 40. 

No wonder student loan refinance is one of the hottest issues in political discourse these days. While the economy has been problematic for a while, COVID-19 was one of the most impactful factors in escalating the debt situation. 

Some student loan relief legislation has already been passed, with some payments and interest being suspended for 2021. Even more significant is that the U.S. Government allowed employers to count student loan repayment as a tax-free benefit with the Consolidated Appropriations Act of 2021.

What Your Employer Could Do

Employers now have a golden opportunity to reward long-term model employees and exciting new hires by investing in student loan assistance programs. It doesn’t cost the company or the employee, since donations are not considered taxable income. 

Some companies are paying lenders directly in recurring payments, while others simply give a bonus lump-sum payment.

Some employers have found a way to compromise, even if they don’t have a full assistance program in place. For example, they can donate an employee’s unused vacation time or sick days to the student loan repayment program. 

These initiatives, while seemingly minimal, can actually go a long way in helping a student to improve their debt-to-income ratio. Even if most companies are just talking about it right now, more employees are taking the initiative and volunteering the idea to the Human Resources Department. 

The fact that big tech companies like Google are adopting their own student loan assistance programs does signify a big change coming. 

People worry too much about debt and not enough about smart investing! Want to learn more about debt? Read our article on why debt is always manageable

Student Loan Refinancing Opportunities

Some companies are also looking into student refinancing programs. But even if you’re not working a dream job for Google, you can still find opportunities outside of work.

Companies like SoFi are already offering school loan refinance programs to students who want to get a break from high-interest rates. 

A loan refinance contract could help you get a lower interest rate, a shortened term, or a lower monthly payment plan to free up more cash flow.

The Future Looks Brighter

Student in Economics

Many people are suggesting that President Biden is probably not going to “cancel student debt” despite Twitter influencers trying their best to hashtag it. But the good news is that states are now individually getting involved with student debt assistance. 

Maine recently decided the state wants to pay off 40,000K in student loan debt for first-time homeowners. 

For more on financial resources available to new homebuyers, read our article on the topic. 

Things are looking brighter every day for tomorrow’s students. So don’t give up and keep exploring all the options open to you, with government incentives, and private lending opportunities!

 

 

Disclaimer: This article is for informational purposes only and does not constitute a recommendation or investment advice. You should not construe any such information or other material as legal, tax, investment, trading, financial, or other advice. Please seek a professional financial advisor before making any investment decision. We are not responsible for and do not endorse or accept any responsibility for the availability, contents, products, services or use of any third party website as stated in our privacy policy.

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Daniel Hall

Business Expert

Daniel Hall is an experienced digital marketer, author and world traveller. He spends a lot of his free time flipping through books and learning about a plethora of topics.

 

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