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Student debt is leading job seekers to seriously consider positions at employers that offer loan repayment assistance as a benefit.
Outstanding education debt has outpaced credit card and auto debt. The average college graduate leaves school $30,000 in the red today, up from $10,000 in the 1990s.
Student loan assistance, which started as a niche offering by a handful of companies, is slowly finding its way into the mainstream menu of workplace benefits — although it’s still not exactly widespread. According to the Society for Human Resource Management’s 2018 Employee Benefits survey, 4% of U.S. companies have offered this benefit since 2016, up from 3% in 2015.
Meanwhile, Republicans and Democrats in Congress have introduced legislation to make such student debt benefits tax-free. Depending on your employer, any help you currently receive could be considered taxable income.
Since the benefit is still in its early stages, each company has its own model. Many employers add caveats, including a minimum time you must have worked at the company to qualify or caps on how much you can receive in a year.
Here’s how the benefit works at six companies:
People visit Estee Lauder booth on day two of the 2nd China International Import Expo (CIIE) at the National Exhibition and Convention Center on November 6, 2019 in Shanghai, China. The 2nd China International Import Expo (CIIE) is held in Shanghai on November 5-10. (Photo by Xu Congjun/VCG via Getty Images)
Xu Congjun | VCG | Visual China Group | Getty Images
The company offers a $10,000 lifetime maximum student loan debt contribution to employees who have been with the cosmetic giant for more than a year.
The incentive is broken down to monthly payments of $100. To be eligible, employees must be full-time, U.S.-based corporate employees, director level and below.
More than 1,000 employees participate in the program and around 80% of those enrolled are millennials, according to Madeline Jaeger, spokesperson for The Estée Lauder Companies.
The student loan repayment program is offered to full-time and part-time employees who have been with the company for at least six months.
Employees who work 20 to 29 hours weekly can receive a maximum of $5,000, broken down into $1,000 a year. Those who work more than 30 hours a week may receive up to $10,000, with a yearly cap of $2,000.
“More than 10,000 Fidelity employees have saved $37 million in principal, plus $18 million in interest payments, since the program begin in 2016, with an average savings of $5,488 per person,” said Kimberly Reingold, director of external communications for Fidelity Investments, in a statement to CNBC.
James Tahaney loads textbooks on to a pallet in preparation for shipping at the Chegg Inc. warehouse in Shepherdsville, Kentucky, U.S., on Thursday, April 29, 2010.
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The textbook company allows entry-level through manager-level employees to receive up to $5,000 a year in assistance, if they have been with the company for at least two years. Their employees with student loan debt also receive $1,000 cash every year.
Marc Boxser, vice president of communications and policy at Chegg, said he hoped to see the benefit become tax-free.
“Why are companies given incentives for continuing education, but not for supporting the education our employees have already undertaken and we benefit from?” Boxser said.
Blue Cross Blue Shield
Employees who work 30 hours or more for the insurer, and have been on the job for three months or more, are eligible. They can also receive financial coaching and help with repayment planning.
The one catch: Your student loans must be in good standing to qualify. (Nearly a third of student loan borrowers are behind on their payments.)
Roberto Machado Noa
The fitness company contributes $100 a month to employees’ student loans.
The plan does not have a lifetime limit as long as the employee remains U.S.-based and full-time.
— Disclosure: CNBC parent Comcast-NBCUniversal is an investor in Peloton.