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How Businesses Can Help Employees With Student Debt
By Jocelyn Brown
June 26 2018 - Over 44 million Americans have student debt, and between them they hold nearly $1.5 trillion dollars in unpaid loans. This means around one in four Americans are currently paying off student loans. And it isn't cheap; recent research found that the average US graduate is spending around $265 a month on repayments. This is causing serious stress for them, with over 50% of employees with student debt claiming that their student debt makes it hard for them to focus on their job. This is a problem for the employees, but it is also a big problem for employers - so how can they help their workers with student debt?
After all, it is important for businesses to try and support employees in any way they can. Here is how your business can help employees with student debt.
Consider Student Tax Incentives
The crippling student debt that Americans feel hasn’t gone unnoticed. Lawmakers are currently trying to pass a bill that will give employees a tax incentive to help lower their employee’s student debt. The bill is called Employer Participation in Repayment Act of 2017 and it is sponsored by two senators so far. If it is passed it will allow employers to make tax free contributions to their employees with student debt, much like a 401k. In the meantime, employers can offer student loan repayment as a benefit or perk, but it will not be tax free. However this is a great way to help your employees, and it could also make it easier for you to attract candidates to future job offers.
The Employer Participation in Repayment Act of 2017
This is an effective method to reduce student debt, allowing employees to spend up to $5,250 per year as a tax free contribution for each employee with debt. This will help graduates financially, and it can also help to attract them to your job offers. Furthermore, recent findings reported by CNBC found that 46% of participants would rather take a job that will help them pay off their student loan than a job with a 401k plan. This highlights how many young employees are concerned about how much debt they are carrying.
Student debt is a big problem for millions of young employees, but businesses can step up and try to help the people that work for them. One of the best options is helping students financially, as this is an effective way to reduce their debt quickly.