When it comes to recruiting and retaining Millennials, companies are going beyond offering retirement savings plans. They are paying down a portion of their student loan debt.
That’s the case for Josh Udashkin, a Canadian college graduate who started luggage company Raden in the U.S. The CEO, according to CNBC, has been offering to match his employees’ student loan payments each month in an effort to help inspire entrepreneurship without fiscal limitations.
Udashkin is part of a growing trend where executives are starting to offer help with their employees’ student loan debt. The policy is specifically geared towards recruiting millennials, retaining them, and in Udashkin’s case, helping them set up their future. Udashkin grew up in Canada where the cost of a college education doesn’t compare to the United States. He was struck by the inability of young people to start their own businesses because of their student loan debt.
Udashkin is an anomaly. He is matching student loan payments each month by the dollar. Many big and small companies opt to pay a portion of the debt over a set number of years. Take Fidelity Investments, an early adopter of the employer student loan benefit. With Fidelity’s Step Ahead Student Loan assistance program, Fidelity gives workers $2,000 per year to pay down their student loans, and the program maxes out contributions at $10,000. Fidelity is just one example, but the list is growing. To accommodate this trend, a number of startups are offering to facilitate this benefit for all types of companies. The hope is that one day it will be as widespread as the 401(K) or other employer sponsored retirement plans.
These developments come at a time when student loan debt is having a big impact on the lives of millennials. Currently, the student loan debt stands at $1.3 trillion and countless borrowers put off buying a house, getting married, and starting a business as result. With retirement years away, selling potential employees 401(K) plans isn’t going to be as effective as offering to help them immediately by reducing their student debt load.
Author: Donna Fuscaldo
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