We Love What Memphis is Doing to Help Its Employees With Their Student Debt
But there’s a new workplace benefit employers are starting to offer, and we’re loving the idea.
Over the past couple of years, companies have begun offering student loan repayment programs as part of their employee benefits packages.
In March, a bill was even introduced in Congress that would give tax breaks to companies that provide up to $5,250 per year to repay an employee’s student debt.
Most recently (on Thursday, to be exact), it was announced that Memphis, Tennessee, will be the first city to offer its employees a little bit of financial assistance by way of helping pay down their student loans.
How This Student Loan Reduction Program Works
Starting July 1, the City of Memphis will contribute $50 a month to its employees’ student loan repayment efforts.
The $50 will go directly toward paying down the principal — an approach that will help eliminate the loans in the shortest possible timeframe. (You can read more about the strategy behind that here.)
To qualify for the Student Loan Reduction Program, employees must be actively employed and working full-time for at least 12 months. Employees are still expected to make their own student loan payments.
“We are proud to be the first municipality in the country to offer this kind of student debt assistance to our workforce,” said Alex Smith, the city’s Chief Human Resources Officer. “We view this as an important investment in our employees.”
The city already has a tuition reimbursement program that provides employees who are attending college with $3,000 a year to put toward tuition costs.
By the (Guesstimated) Numbers
Smith noted that one of the difficulties they’ve encountered while rolling out the program is getting more exact estimates as to how many employees are carrying student loan debt.
The program is being executed by Tuition.io, a company that manages employee student loan benefits. On average, Tuition.io initiatives have a 14% adoption rate.
For the City of Memphis, an adoption rate of 14% would mean about about 840 eligible employees taking advantage of this service. However, when the program was tested in the HR Division earlier this year, there was a 20% adoption rate — slightly higher than the average.
In 2016, student loan debt in Memphis grew by almost 5% compared to the slightly more than 3% growth seen nationally — so it would make sense if a higher-than-average number of workers take advantage of the program.
Pay Down Your Student Loans Faster
While we like the trend of companies (and now an entire city!) helping their employees to pay down their student loans, it may be a while yet before this becomes a common workplace benefit.
In the meantime, we’ve got you covered with plenty of tips and tricks for paying down your student loans on your own.
Check out our complete guide to student loans to find out everything you need to know, from FAFSA to repayment (and read up on these five common student loan myths, and how they’ve been debunked).
And if you’re looking for ways to make a little extra money to put toward your student loans each month, here are 32 legitimate ways to make money from home today!
Grace Schweizer is a junior writer at The Penny Hoarder.