Forward-minded companies that really value their employees may want to set up a plan to help them pay off student debt.
That’s the thinking behind a new program from Fidelity Investments in Boston. The company on Thursday introduced a Student Debt Employer Contribution program to let employers make after-tax contributions toward the student debt held by their employees.
“The Student Debt Employer Contribution program addresses a growing need across all generations struggling with student loans, in a ‘one-stop’ experience for employers,” Kevin Barry, president of Fidelity Workplace Investing, said to Forbes.
The record level of student debt in the U.S. is partly blamed for preventing the millennial generation from moving away from home, buying a house and starting a family. Education loan balances in the U.S. total $1.4 trillion, according to Experian. The average outstanding balance is $34,144, up 62 percent in the past 10 years, CNBC reported.
Fidelity’s employee benefit program, aimed at lessening the burden of student loan debt and increasing recruitment and retention, will begin later this year.
“We’ve seen big demand for a benefit like this, from both large companies and small,” Kenneth Ericson, a Fidelity vice president, told BuzzFeed. “It’s a significant tool that can be used to recruit new employees and retain existing ones.”
Student loan repayment programs are still in their formative stage with 3 percent of firms surveyed by AonHewitt currently offering assistance. Fidelity, Aetna, PwC and Penguin Random House are a few of the companies that already contribute to employees' loan payments.
AonHewitt says an additional 5 percent of surveyed companies said they are likely to add the benefit and 24 percent are moderately interested in adding the benefit.
More than 80 percent of workers with student loans surveyed by IonTuition said they would like to work for a company that provides a student loan repayment benefit, CNBC reported.
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