Page 25 - ARUBA TODAY

BUSINESS Wednesday 20 november 2019
A25

More employers offer workers help paying off student loans

By SARAH SKIDMORE SELL assistance program last Part of the problem is that
Associated Press year that includes monthly money given to employ-
Americans collectively owe payments to a lender, as ees to help pay off student
nearly $1.5 trillion in student well as resources to help loans can be considered
loans — more than twice students find the most ef- income and be taxed.
the total a decade ago. ficient way to pay off their So, there is little financial
It's a burden that weighs loans. incentive from a tax per-
on millions of adults, shap- Several companies say spective for the employee
ing their life choices and of- their programs have prov- or employer.
ten stunting their financial en an effective recruitment As such, employers have
growth. and retention tool, particu- had to find more creative
Now a small but growing larly in this tight labor mar- work arounds — such as
number of employers are ket. paying the provider direct-
stepping in to help. About Fidelity said its employees ly, as Fidelity does, or trying
8% of employers offer stu- regularly cite loan assis- a more unique retirement
dent loan repayment as- In this Oct. 24, 2019, file photo students walks in front of Fraser tance as one of their top payment solution.
sistance in 2019, according Hall on the University of Kansas campus in Lawrence, Kan. benefits and a key reason Abbott Laboratories, a
to the Society for Human Associated Press for joining the company. medical devices compa-
Resource Management. ation; a few months later vantage of another work- Additionally, those who are ny, launched its Freedom
That's up from 4% in 2018 the company rolled out its place benefit, which allows enrolled have a 70% lower 2 Save program to help
and 3% in 2015. student loan repayment her to put any bonuses or turnover rate in the first employees meet the dual
Some experts anticipate assistance program. added compensation to- year than their peers. challenges of needing to
more employers will add Fidelity developed the pro- ward her balance, and get "(Companies) are look- pay down debt and save
their own programs to gram after a number of the loans paid off by 2021. ing at alleviating stress, for retirement.
help hire and hold on to employees — who were She's aiming to buy a home to shave that strain out of Under the program, par-
a younger generation well-versed in budgeting in 2020. daily life so they (employ- ticipants must show that
of workers that is more and planning for financial "It was a major stressor ees) can be more happy they are paying 2% of
bogged down with debt goals — told CEO Abigail for me," she says. "Now it and engaged citizens of their salary toward student
than its predecessors and Johnson that they were doesn't really stress me out your workforce," says Asha debt repayment and, in
increasingly cites loan re- having trouble doing the at all. " Srikantiah, head of Fidelity's exchange, Abbot contrib-
payment assistance as a same in their own lives in Employers format repay- student debt program. utes 5% to their 401(k) with-
benefit they need to have. large part because of stu- ment assistance in a vari- Fidelity now even offers a out requiring the employee
"The burden of student loan dent debt. ety of ways. Some offer a variety of student debt as- to contribute anything.
debt has become salient In turn, Fidelity decided to match of employee pay- sistance repayment pro- Abbott found the program
and exhausting," said Julia offer its employees monthly ments while others offer a grams to clients, catered was a useful tool for re-
Pollak, a labor economist assistance up to $10,000 flat contribution amount, to their needs. cruiting people who need
at ZipRecruiter. "It's crushing total over the course of 5 both up to a threshold. It's a puzzle why more pri- advanced degrees that
... there is huge demand for years. The financial services Estée Lauder Cos. offers vate employers have not often require additional
student loan assistance." firm says more than 10,000 its U.S. employees who offered such benefits, said loans. About two-thirds of
In 2016-2017, almost 60% employees have taken ad- have been at the com- ZipRecruiter's Pollak, de- the company's employees
of people who graduated vantage of the program pany at least a year $100 a spite demand from em- have master's degrees or
with a bachelor's degree since it was introduced in month toward their student ployees. The companies PhDs.
took on debt and the av- 2016. loans, up to $10,000 total. are not paying off the full Fidelity's Asha said some
erage amount among Hamilton, currently a Fidel- It launched the program loan and, for a minor cost changes are being con-
that group was $28,500, ity relationship manager at in 2017 and nearly 1,000 they are greatly boosting sidered in Washington that
according to The College an investor center in Na- people have signed up; employee morale. could encourage more
Board. For some who seek ples, Florida, makes a reg- about 80% are millennials, "It's an easy win," said Ste- employers to get on board
advanced degrees, the ular monthly payment of according to the beauty phen Kapusta, vice presi- in the near future.q
borrowing can grow to $184 and Fidelity makes a products company. dent of channel strategy
$100,000 or more. $167 contribution. To date, Streaming service Hulu at ADP, a human resource
Brittany Hamilton, 27, grad- the company has contrib- launched a student loan services company.
uated from college in 2015 uted almost $7,400 to help
with $32,000 in debt, even pay down her balance.
though she worked full time Hamilton estimates Fidel-
while earning her bach- ity's program will help her
elor's degree. She went shave three years off her
to work for Fidelity Invest- payment time frame.
ments shortly after gradu- She also hopes to take ad-