About 4 percent of employers offer some sort of student loan repayment benefit, up from 3 percent in 2015, according to the latest survey from the Society for Human Resource Management. Companies that help employers provide workplace benefits, like Fidelity Investments, are adding student loan assistance programs to their menus. Typically, employers make a lump-sum, after-tax payment, monthly or annually, toward an employee’s student loans.
What sets Abbott’s program apart, Mr. Fussell said, is that it promotes both paying down student debt and saving for retirement. He added that putting off retirement saving can be costly: Every decade of delay roughly doubles the amount needed to be saved.
“It all starts with starting early,” he said.
Americans collectively owe more than $1.5 trillion in student loans. Abbott, citing federal statistics, said the average monthly payment for borrowers ages 20 to 30 was $350, which often means there is nothing left for traditional retirement plans.
Many of Abbott’s workers have advanced degrees in science, engineering and business. The company last year hired more than 1,000 people under 35 in the United States, the vast majority of whom had college degrees. More than a third of those ages 31 to 35 had a doctorate, and the same percentage had a master’s degree, so their debt is relatively high, Mr. Fussell said.
Rariety Monford, 26, an engineer in Abbott’s professional development program, said she was eager to take advantage of the new benefit. Ms. Monford, who is from Cincinnati, graduated from North Carolina Agricultural & Technical State University in 2016. She said she had chosen the school even though it would cost her more as an out-of-state student. With about $60,000 in student debt, she makes about $800 a month in loan payments. Paying off the debt, she said, is her “No. 1” goal.
Retirement, Ms. Monford admits, seems far away, so it’s helpful that her employer is looking ahead for her. “I’m thinking of the immediate, here and now,” she said.
Here are some questions and answers about employer education benefits:
What if my employer does not offer student loan benefits?
Workplace student loan benefits are still scarce, Mr. Kalscheur said, but many employers do offer some sort of match for retirement contributions. He advised young workers to try to make at least the minimum contribution to their 401(k) — often, 3 percent of their pay — to get the match. Then they can put anything extra they earn — perhaps from a second job or a bonus — toward paying down their student debt faster. They can increase their retirement contribution in the future, he said, when they are more financially stable.