Student loan debt is growing at an alarming rate. US student loan debt in the US in 2017 is at $1.3 trillion. That’s Trillion with a “T”. It’s no wonder that employees feel underwhelmed on payday when a good chunk of their pay is going to their student loans. I recently read an article on the City of Memphis and their effort to help employees deal with this very real issue.
Memphis put a new program in place for employees who have been with the city for at least one year to contribute $50/m to an employees student loan account. For the lucky ones who never had student loan debt, subsidizing $600 a year may not seem like a lot, but it actually can bring the length of the loan down by quite a bit. This is a fantastic way to attract employees and potentially keep them.
Though I haven’t heard any stories about those in Memphis taking advantage of this benefit, there are some stories from the private sector that highlight just how powerful this can be to any retention strategy. A 23 year old working at PricewaterhouseCoopers spoke about how grateful she is to this benefit to help her knock down the $57,000 she has in student loans. “When someone helps you, it makes you feel appreciated.”
We might be a long way to seeing this widely adopted across more of the public sector, but as it grows in the private sector it will be something to contend with. While only about 4% of companies offered some form of student loan assistance in 2016, that could increase five-fold to 20% by 2018, according to a survey of 320 companies by Willis Towers Watson. Unconventional benefits are becoming the new norm.