A growing number of employers have stepped up their efforts, relying on their 401(k) savings plan, to assist employees in paying off student loan debt, while saving for retirement.
In fact, a recent survey by EBRI of 250 companies with at least 500 employees revealed that one-third have a program in place to help employees with repaying their loans or are considering implementing one in the near future.
The latest company on board with a student loan repayment program for employees is Raytheon. The Waltham, Mass.-based company on Monday said through the Raytheon Student Loan Repayment Contribution, eligible employees who aren't able to make student loan repayments and contribute to their 401(k) can get a company matching contribution (three or four percent depending on years of service), if their student loan repayments reach the percentage of the company match for which they're eligible.
The company said it will make a dollar-for-dollar contribution for amounts employees spend repaying their student loans, up to their maximum match percentage through the 401(k), called the Raytheon Savings and Investment Plan. It said the program benefits will begin to accrue in 2020 with company contributions deposited in employees’ 401(k) accounts in the first quarter of 2021 and years following.
Student loan debt has skyrocketed to $1.5 trillion, saddling 45 million Americans with payments that are out of their reach. Many Americans holding student loan debt have indicated in surveys that they have had to delay a traditional milestone such as marriage or buying a home because of their student loan debt. For many more, it has interfered with their relationships and it has gotten in the way of them saving for retirement.
And considering that six out of 10 adults with student loan debt have voice concerns about switching employers to receive help in paying off the debt, many companies are responding with a variation of offerings to satisfy and retain their employees.
Among other companies that are at the forefront of helping workers to repay their loans is Abbott, a health-care company headquartered near Chicago. A year ago, Abbott launched the Freedom 2 Save benefit program to help employees pay off student loans at the same time they start saving for retirement.
Abbott had a 401(k) program in place with a match of up to 5 percent. The firm added a component that allows employees to use part of their salaries to pay off their student loans instead of contributing to the 401(k) savings plan. In return, the employee is given the same match of up to 5 percent, but the matching money goes into the retirement savings account.
Property casualty insurer, The Travelers Companies Inc., recently announced it will implement a program next year. Through its Paying It Forward Savings Program, the firm will make a matching contribution to the 401(k) accounts of employees paying down student debt. It will make the contributions even if an employee isn't contributing to the company 401(k) plan, matching what the employee is paying off in loans, up to 5% of their salary or a maximum of $6,500 a year and put that into a 401(k) account for the employee.
Several other employers offer a variation of student loan repayment programs that are not necessarily tied to their 401(k) savings plan. Among them are Natixis Global Asset Management, Aetna, Fidelity Investments and SoFi.
One of the more generous benefits is offered by visual computing technology company, Nvidia. Employees who have been with the company for more than three can apply for reimbursements of up to $6,000 a year, or $30,000 total.