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Employers are offering to help pay their employees’ student debt

Businesses compete for Millennial talent

Employers and businesses across the country have begun to help pay their employees’ student loan debt, a trend that may be catching on as job creators compete for talent in the Millennial workforce.

Finance & Commerce reports that the new benefit “helps businesses lure prospective employees as they grapple with tight labor market conditions marked by a jobless rate near its lowest in almost five decades.”

The website reports on one case in which an employer contributed $100 per month toward an employee’s student loan debt; that amount allows the young woman to pay more on her interestt, giving her “a bit of breathing room:”

Such plans are spreading. They were on offer to staff at about 8% of U.S. employers in 2019, more than double the 2015 level, according to an April survey by the Society for Human Resource Management.

Another study by business adviser Willis Towers Watson found that 32% of firms are considering introducing a similar benefit by 2021.

“If you have a young demographic, offering benefits like student loan repayment could be the way to go,” said Alex Alonso, chief knowledge officer for SHRM.

Pronounced competition for talent and the elevated debt burden for a generation of Americans making their way into the workforce are driving the change…

The balance on outstanding student loans reached $1.6 trillion at the end of the first quarter, and more than a quarter of that is held by people younger than 30. The effects reverberate through their social and economic lives, making it harder to start a family, buy a home or purchase big-ticket items, research shows.

The website reports on a proposed law, the Employer Participation in Repayment Act, which “would provide tax relief to firms that [help pay off student loans]. It has bipartisan sponsors, including Democratic presidential candidates Seth Moulton and Amy Klobuchar.”

Read the report here.

MORE: ‘Sugar Daddy’ business thrives as more coeds sign up to pay off student debt

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