Admittedly, if you’re under the age of 35 there’s a very high chance that you are in some sort of a struggle with your student loans. It’s become a real problem across the nation; recent graduates trying to balance their new(ish) jobs, new lives, rent checks, and student loan payments, all with remembering to feed themselves on a daily basis. Well, there’s a solution brewing: If you’re looking for a job along with some help on paying your student loans, look no further than the city of Memphis.
Recently, the city’s government announced that a new Student Loan Reduction Program that will help eligible employees reduce their student loan burden. The program goes into effect July 1, making Memphis the first city in the nation to provide this benefit, according to Tuition.io (who will be administering the plan).
“As the first major American city to embrace student loan assistance, Memphis is proving itself to be a leader in understanding and catering to the needs of today’s workers,” said Scott Thompson, CEO of Tuition.io. “Their initiation of this program should be a clarion call for other municipalities to follow suit.”
Student Loans Cause Major Workplace Issues
The fact is, student loans and the debt that follows is a major workplace issue. Employees who struggle financially, or are worried about how they are going to pay their bills, are less productive, and are shown to not provide their office with positive, bright, energy and drive.
The number is frightening, but the total amount of debt from student loans throughout the U.S. has now reached $1.4 trillion, and though, admittedly a small step this Memphis program will allow eligible city workers to receive $50 a month from the city government to go toward principal reduction on their student loans. To be eligible, an employee must work full-time and have been on the job at least 12 months.
“We are proud to be the first municipality in the country to offer this kind of student debt assistance to our workforce. We view this as an important investment in our employees,” said Alex Smith, City of Memphis Chief Human Resources Officer.
Consumer Affairs reports that because student loan debt has become so pervasive, more private sector employers are considering help repaying it as a way to attract younger, well-educated employees. A recent report from outplacement firm Challenger, Gray, & Christmas found nearly 73% of the firms it surveyed either offer, or plan to offer a student loan assistance package.
“With the average student loan borrower from the class of 2016 facing about $37,172 in debt according to Forbes, – and those with advanced degrees likely have much higher debt – it’s no wonder employers have begun to see this as an opportunity to recruit young workers,” said Andrew Challenger, the firm’s vice president.
With the older generation retiring, firms, of course, must replace these workers with younger, recent graduates, (who tend to have the most student loan debt).
According to the Society for Human Resource Management (SHRM), some companies will pony up as much as $5,000 or $6,000 a year. In some cases, the repayment packages are a replacement for tuition reimbursement. Some companies are offering student loan repayment in lieu of sign-on bonuses, and others offer loan repayment funds as incentives.
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