Given the recent plague of student loan debt upon the millennial generation, there have been many proposed solutions to eliminating this “disease” from various companies, startups, and the government. There has been a recent new trend in the fight to “cure” student loans that involves some startups and employers.
Previous solutions included federal loan consolidation where graduates could combine their loans into one single sum with one new overall interest rate and payment plan. Another solution was refinancing a loan through a private company where new interest rates and payment plans were offered. Plenty of startups came around to mediate these processes and spread education on student loans overall.
Each of these offers is meant to simplify the loan payment process as well as alter it in favor of the borrower. The main objective was to set a plan towards paying off the student loan; this accomplishes two very important things. The borrower eliminates the accrued debt, and the lender receives their initial loan and interest.
Despite these solutions, the most recent estimate on outstanding loan debt is up to $1.23 trillion according to research done by MarketWatch, and the average amount of debt per person is roughly $30,000. These numbers are rising along with the portion being deferred and unpaid.
A new solution is being offered to graduates in the labor market.
Several employing companies have begun offering an employee benefit package that helps pay off student loans, and some employers started offering monthly benefits towards these loans. There are good reasons behind this. One, a company can obtain and retain skilled workers because the loan-help benefit is an attractive offer to millennials coming out of college. Second, this is a very logical move because new graduate employees are not going to invest in other benefits such as 401(k) with outstanding debt.
This is a new growing trend that many companies are taking part in since it just seems to make sense. Companies are going to be forced to hire millennials as they begin to populate a higher percentage of the labor market each year. Naturally, an employee benefit tailored towards student loan payment is needed to accommodate significant portions of the labor market hampered by debt.
While this is one of the new ways that graduate debt can be eliminated, the cost of higher education is not helping the upcoming generation handle debt. Prospective students have no trouble obtaining the funding they need, whether it is from the federal government or from one of the best banks for student loans. Even though companies have started to take a portion of the $1.23 trillion, the issue is still quite alive. Despite these new benefits, it simply sheds light on the “plague” of the millennial generation which is sure to carry repercussions for many years to come.