The New Workplace Perk: Help With Student Loans

"Maybe you’ve seen the ads? A somber voice ticks off the debts a young woman piled up while she attended college. 'Why did she borrow $42,000 for tuition?' the voice says, over images of the woman moving into her dorm and studying in the library. 'Why did she borrow $19,400 for room and board?' 'She did it to work for you,' the announcer tells potential employers, 'and now you can do something for her,'" according to Marketplace. 

"That something is help paying off her debts. Gradifi, the company behind the ads, provides and manages an online portal that allows employers to make direct payments on their workers’ student loans. Companies pay Gradifi a monthly fee of a few dollars per employee.

At the company’s headquarters in downtown Boston, CEO Tim DeMello showed off a recent expansion. 'I started the company a couple years ago, there were just three of us,' he said. 'Now we’ve got 46 people on two floors.' Gradifi launched the loan repayment service last January with one client, the consulting firm PriceWaterhouseCoopers, DeMello said. 'Now we're adding about five to six new clients every single week,' he said. 'We've got about 230 companies.'

And demand is only growing, as outstanding student loan debt has reached $1.4 trillion. That’s preventing a lot of younger workers from saving for retirement or buying homes, DeMello said. 'The millennial workforce will be 50 percent of the workforce by 2020, and 75 percent of them graduate with student loans,' he said.

Startups like Tuition.io and Student Loan Genius offer similar services to help employers pay down those loans, and benefits powerhouse Fidelity just entered the business. Some employers are offering the perk without a middleman. Earlier this year Choptank Transport, a logistics company on Maryland’s Eastern Shore, announced it would start matching its employees’ student loan payments up to $1,500 a year."

NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

 

Publication Date: 11/13/2017


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