A small but growing number of private employers are offering their workers the opportunity of acquiring extra cash to go toward paying down their student debt. The local government is starting to join the trend and assist employees with student loans as well. Starting July 1, 2017 full time employees that are working 40 hours or more in the city of Memphis will be eligible to receive $50 a month for their loans to help pay it off. The city of Memphis Chief Human Resources officer Alex Smith made a stated “We are proud to be the first municipality in the country to offer this kind of student assistance to our work force.” Approximately about 840 people or 14% of the city’s workforce are projected to benefit from the program says Smith.
The workers that are benefiting from the new student loan benefit plan include workers from across city divisions including the police and fire departments, as well as the government’s legal and Human Resources Staff. Smith says they’re looking to recruit younger workers who can benefit from this repayment plan. There is no age limitation for the student loan repayment benefit. All full time workers are eligible for the plan regardless of when they borrowed the money or whether it’s a federal or private student loan.
According to the St. Louis Federal Reserve Bank the average borrower in the Memphis metropolitan area has an estimated $31,000 in student loans. The total amount of student debt has grown by 5% during 2015 which is faster than it did across the country. According to the society for Human Resources Management only 4% of all companies give workers money that they can use to pay down their student loans. In March, legislation with the Bipartisan support was introduced in Congress which would encourage more companies to offer the benefit by making it tax deductible. The idea for companies to help employees pay their student debt is growing fraction. There are various big name companies that have launched the student repayment program for their employees last year. The companies include PWC, Aetna, Fidelity, Prudential and Staples.