How would you feel if your employer helped you pay off your student loans? Many students would like the idea of this and soon, it may be a reality. Most company benefits include things such as health insurance, retirement options, life insurance, and paid holidays, but now, paying off student loans may be making it to the list.
We all know how difficult it is to pay off student loans, especially when you are already struggling to afford the bills that you have. Unfortunately, if you have student loans, paying them back is a part of life and not something that you can simply opt out of.
While not many companies offer student loan payoff benefits, some do (including LendEDU), and it is a huge help. For instance, Natixis Global Asset Management S.A. based in Boston, MA offers to pay up to $10,000 of students’ federal student loans. The employees must have worked at the company for five years before the amount will be paid.
In addition, another company by the name of Fidelity Investments is planning to launch a similar program where they will pay $10,000 towards an employees’ federal student loan debt. Music and ticketing company, Live Nation, also announced a student loan repayment benefit in 2017.
Student loan debt has no real solution in sight and the amount of debt continues to rise as tuition rises and more students want to pursue a degree. Fortunately, student loans do make it possible for students to attend college, but at what cost really?
The Negative Effects Loan Debt Has
There are a number of negative effects that loan debt has on students and it is causing many graduates to hold off on having a family, buying a car, purchasing a home, and more. Many students do not want to hop into more debt when they already have the student debt sitting high above their heads.
The Companies See it as an Investment
Companies are not just simply paying off their employees’ debt as a favor. They see it more as an investment for the company. The employee is going to work harder and be more productive to ensure that they are able to reap the rewards once they meet the requirements. This is ideal for the company because the employee becomes more invested in his or her work and strives to do better.
Although it is beneficial for companies to offer this type of program, only about three percent of all of them do. This means that all others do not have any type of loan repayment program in place, which leaves other employees to pay their student loan debt off themselves.
What’s the Real Problem Though?
One thing that comes to light throughout this whole company benefit talk is that student loan debt is astronomically high and continuing to rise. It is a problem and there is no relief in sight.
As the cost of college continues to rise, students will continue to take out large loans. If the student never finishes college or they never get their dream job that pays six figures, then they will find it difficult to make their payments and sometimes default on the loan itself. As of today, there are few opportunities for debtors to save money on their student loans. The Department of Education does offer some income-driven repayment plans but has yet to launch a federal student loan refinancing initiative.
However, you can refinance student loans with a private lender, but you will lose federal benefits if you do.
The majority of students graduating with an undergraduate degree have some sort of substantial student loan debt – somewhere in between $20,000 and $35,000.
Student loan debt has by far doubled over the last decade and it continues to climb in an upward trend. If you have debt that needs to be paid down, consider working for a company who sees you as an investment and not just another person collecting a paycheck.
If you are unable to work in a position that offers you student loan repayment benefits, then you may want to consider alternatives such as working with your loan provider to come up with a plan that works for you.
Remember, one of the worst things you could do would be to avoid paying your loan and ignoring it altogether, as you face the possibility of wage garnishments and losing your federal student aid.
Author: Jeff Gitlen
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