Javier Perez would like to move out of the suburbs to Washington, D.C. and cut back on his commute. But he can’t afford it. He’d like to be able to travel more often to see his parents in his native Puerto Rico. But again, he can’t afford it.
Looming over all of Perez’s financial decisions is more than $30,000 in student loan debt.
"Paying down debt, it just stinks," he said. "It’s always in the back of your mind that you have debt that you need to account for."
Perez is now getting help paying down that debt and it’s taking a significant weight off his shoulders.
He works as an assurance associate at PricewaterhouseCoopers, which began offering its Student Loan Paydown program in the summer of 2016.
As one of the first programs of its kind, PwC promises eligible recent grads $1,200 per year toward their student loans for up to six years. Given the time value of money, the company says this benefit could help employees pay off the equivalent of $10,000 in student loan debt.
"It’s just a huge burden that’s taken off of you," Perez said, adding that all of his co-workers also have student debt. "I thought it was amazing."
PwC is not the only company to offer the benefit. Fidelity has begun offering a $2,000 annual contribution, up to $10,000, payable directly to the loan provider. Penguin Random House announced in November it would start making student loan payments of up to $1,200 per year for seven and a half years. A number of smaller companies have plans to offer the benefit as well.
Alexa Merschel, one of PwC’s campus talent acquisition leaders, said 8,200 employees have signed up so far for the benefit and that number is growing.
"It seemed like a win-win, to provide a unique benefit to our people while also trying to focus more broadly on the societal issue of student loan debt," she said.
Most Recent Grads Have Debt
The nationwide student loan debt is more than $1.4 trillion. While the size of individual debt varies greatly by degree, student loan debt in the aggregate has been blamed for everything from delaying marriage to delaying homeownership.
According to Earnest data, the average undergraduate debt is $46,000. For a graduates degree such as an MBA, it’s $69,000.
Numbers like these might explain why 54% of recent college graduates said they would prefer their employers offer student debt assistance over a 401(k).
With 80% of the PwC’s workforce made up of millennials, the company sees the paydown program to be an attractive benefit. And new graduates applying for jobs are paying much more attention to benefits packages. More than 75% of young professionals surveyed said a student loan pay-down program would be a major factor in deciding on a job offer, according to American Student Assistance.
"Word has definitely gotten out especially through the social media channels as well as when we are on campus. It is a differentiator," PwC’s Merschel said.
At a Tipping Point
While the need is there, only about 4% of employers report offering student loan paydown assistance, even though more than 90% of employers in a recent IonTuition survey said student loan debt is stressing out their employees.
But in this highly competitive recruiting environment, Merschel predicts more companies will soon be offering student debt assistance.
"I always view us as being a bit of the ringleader and coming out with benefits that are a little bit different. I think you will probably see people following suit," she said. "I think we’re just at the tipping point right now."
Short of providing a contribution, other employers are simply providing more education through wellness fairs and benefits websites about student loan refinancing.
Full-time workers with student loans are very good candidates for refinancing. With a track record of regular income, lenders can offer highly competitive rates that are lower than the original rates. That lower rate can save tens of thousands of dollars over the lifetime of the loan. At Earnest, the average savings for a client who refinances their student loans is $21,810.
Financial experts say student loan debt is causing millennials to delay major life decisions that previous generations had already made by now. "Any life decision that you are taking, you can’t just jump at the spur of the moment," Perez said.
Now employers are helping.
This article originally appeared on Earnest.