As student loans continue to hurt the finances of Americans, some companies are looking to help their current and prospective employees with their debt as a part of their total benefits package. MidWestOne is the latest employer to hop on the bandwagon.
In a recent press release, MidWestOne Bank announced the Student Loan Debt Reduction benefit. After an internal company survey, Funk decided the responses “definitely showed the need” for a new kind of employee benefit, targeted at student debt repayment.
Over 70 percent of MidWestOne employees responded to the survey. Many reported student debt of over $10 thousand, and a few employees claimed to be in the $40 thousand range. As the second largest category of consumer debt in America, student debt is a reality of life for many working-age people. It comes as no surprise to learn that the employees of MidWestOne are no strangers to high loan balances from past education.
In the case of MidWestBank, employees with a tenure of 30 days or more are eligible for the program. The benefit is worth up to $10 thousand per person with monthly contributions in the range of $50 to $100. The student loan relief payment depends on each employee’s years of service at MidWestOne. The program is a service provided by Tuition.io, a loan management firm from California. Other loan servicers and benefits companies such as Fidelity offer similar student loan services to employers.
As the competition for the top talent in the labor market heats up, more companies will inevitably add their own student loan programs to attract the best people. Tuition.io boasts more than 100 companies on its platform, and more companies are likely to enter the student loan benefits space in the coming years. Other companies such as the accounting powerhouse PwC, online textbook retailer Chegg, and office equipment retailer Staples have all added student loan payments to their suite of employee benefits.
For employees with multiple loans and a mix of federal, state, and private student debt, a company-provided repayment benefit can be a lifesaver. Having this benefit on your side can help debtors make additional payments on top of their company’s contributions.
The student loan market is a massive source of consumer debt for Americans. With over 44 million borrowers and nearly $1.41 trillion in debt, it’s a major drag on the upward mobility and financial stability of the labor market. Employers have an insatiable demand for skilled and highly-skilled labor in today’s technologically-driven economy. Student loan benefits are a powerful incentive to attract highly educated (and highly indebted) people.