The list of companies deciding to help employees with their student loan debt is growing. Aetna recently announced that next year it'll match eligible employees' student loan payments up to $2,000 per year, with a maximum benefit of $10,000.
Only 4 percent of companies offer a student loan repayment assistance benefit, according to the latest annual survey by the Society of Human Resource Management. But Lenny Sanicola, a benefits expert at WorldatWork, a nonprofit association of 70,000 mostly Fortune 500 human resource professionals, says that the perk is catching on.
Given that the average amount of student debt is about $37,000, $10,000 is a significant benefit. That, matched with the grad's payments, can help retire more than half the average debt balance over five years.
Such help is critical, because America's student debt crisis is keeping young workers from getting on their financial feet, starting families, and buying homes.
Student debt can also cause harm 50 years down the road. Millennials who start their careers with $30,000 in student loan debt can end up with $325,000 less in retirement savings than if they had no education debt, according to one study by LIMRA, an association of more than 850 financial services companies.
How Good is the Benefit?
Here are six essential questions to ask to size up the offers.
Who's eligible? Employers use this benefit to attract and retain workers who have the skills they need, says Chris Duchesne, a vice president at EdAssist, the benefits administrator behind the plans offered by Aetna and a dozen other companies. Your chances are best if you're a job prospect only a few years out of college, and you're in a high-demand field, such as engineering, IT, cybersecurity, actuarial sciences in the insurance industry, and nursing.
How much of a benefit is possible? The amounts vary. PwC, formerly PricewaterhouseCoopers, the professional services firm, will pay $1,200 per year for six years, or a maximum of $7,200. Similar to Aetna's plan, Fidelity, the investment giant, pays $2,000 a year up to a total of $10,000.
Some companies, such as NVIDIA, the Silicon Valley visual graphics company, pay as much as $6,000 a year up to $30,000. Some federal agencies can pay up to $10,000 per year of government employees' student debt, up to a total of $60,000.
Is there extra value? Yes. "There are no prepayment penalties on student loans, so the employer's matching payment can help you pay off your loan quicker," says Mark Kantrowitz, publisher of Cappex.com, a free service that connects students with colleges and financial aid.