Thursday was move in day for students at Kent State University. The incoming class of freshman who will graduate in 2021 will have the most student debt of any graduating class in U.S. history.
44 million Americans are paying off $13.4 trillion in college loans. But help is on the way. A small amount of U.S. employers are moving in the direction of paying off their employees student loan debt.
“I got the presidential and trustee scholarship so I’m able to afford going out of state,” said Tori Lillie, a Kent State Freshman.
“All said and done from out of state tuition, subtracting the scholarships probably about $60,000,” said her Dad, Pete Lillie.
“I have friends that are in their 40s and they’re just now paying off their debt from 20 years ago, so if you can come out of school and that first job helps pay off student loan debt, that’s certainly something to attract students or potential new hires,” he said.
In a growing trend of expanded workplace benefits, 4 percent of U.S. employers, namely, large companies like Aetna, Fidelity and PWC, are offering to pay off portions of their employees college debt.
“It’s a good way of attracting talent. That’s primarily why they’re doing it,” said Lockwood Reynolds, a Kent State Economics Professor.
Reynolds said for employers, paying off their workers loans makes a lot of sense. The trend, he estimates, will grow in popularity.
“Employees are willing to sacrifice some wages to gain these benefits as other forms of compensation and so if firms think they can attract a better pool of workers by offering these incentives, then they will do that,” he said.
It's a payoff many future employees are looking forward to.
“I want a good education but I also want to be able to afford it so that way in the future I can make a living and it’ll be easier to move on in life,” said Lillie.
One hurdle for companies in implanting this benefit though, is the U.S. tax code which makes it more expensive for businesses to do this.
A bipartisan bill in congress though is looking to change that and incentivize more businesses to take on employee debt.