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Categorized | Paying For College

Company Loyalty Can Result In Student Loan Payoffs

Student Loan DebtWe all know the benefits of going to college. College graduates have a much greater earning potential on average than people who do not earn a college degree. However, the cost of `obtaining a college education has increased by over 30 percent over the last several years. A single year of college can cost between $10,000 to over $40,000. With skyrocketing educational costs many students and their families are unable to pay these expenses by themselves. In turn, more and more students are seeking financial assistance in the form of student loans.

Debt after Graduation

Each year as many as 60 percent of the student population borrows money for school. While student loans seem like an attractive solution to anyone trying to complete their degree, they can turn into a large burden after graduation. As of October of 2012, the average student loan debt for 2011 graduates was $26,600, a 5 percent increase from the previous year’s graduates. On average 20 percent of college grads have $40,000 or more in student loan debt. These monetary figures create quite a burden for recent graduates who are just start out and either still looking for a job, or probably at an entry-level paying position.

Repaying Student Loan Debt

There are a few different options for former students struggling to repay their educational debts. Programs such as the Public Service Loan Forgiveness program or Income-Based Repayment are helping many to get in control of their educational debts. However, some employers have now jumped on the bandwagon in support of those who have student loan debt by using a new trend in repaying these loans termed employer based loan repayment assistance programs.

Employer Based Loan Repayment Assistance Programs

Under these employer sponsored programs, eligible employees are given a monthly stipend to help make their student loan payments each month. Many of these programs are based in public interest work where salaries tend to be lower than in the private sector. Government agencies, some school districts and healthcare systems also offer student loan repayment assistance. Public servants, teachers, doctors, lawyers, and nurses seem to see the most assistance from their employers. However, many companies are following this trend and helping their employees pay off student loans.

Company Loyalty Can Equal Cash

If you don’t work in any of the aforementioned careers or business, you can still qualify for your employer to help in paying off your student loan debt. Just as many private companies pay moving expenses, holiday bonuses, retention bonuses, recruitment bonuses, performance bonuses, year-end bonuses, or sign-on bonuses, many of them are now paying college education debts. Companies appreciate your loyalties and are starting to reward employees at 10 years, some even do so at two or three years, with the company by paying off their student loans. Doing so is beneficial for the company as they would rather help a loyal employee pay off student loan debt than re-hire and train someone to replace you in their workforce.

Common Employee Requirements

Repayment of student loans is a much-appreciated perk at several companies. Though you should be aware of a few points. You may have to sign an incentive contract to have your employer assist in paying off your student loans. It is also wise to consult with a tax advisor as you may have to pay income taxes on the amount your employer put towards your student loan debt.

When you are job hunting, or when you have your next annual performance appraisal, you may want to broach the topic of student loan repayment with your potential or current employer. Doing so could mean a big financial burden lifted from you. Some employees have managed not to pay their student loan debt at all, and had them paid 100 percent by their employer. It is worth asking to move on with financial freedom in your life.

About the Author:

Today’s guest article comes from Ryan Ayers. He is a writer who creates informative articles in relation to education. In this article, he describes company sponsored loan payoffs and aims to encourage further study with a law degree in trial advocacy.

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