Saving for retirement is one thing, but many Millennials are burdened with paying back thousands in student loan payments after college. As first reported by FOXBusiness.com, Gradifi is one company that has designed a new benefit program for employees that helps pay down debt while they work called The Student Loan Paydown Plan.
“A lot of people are starting to see it now somewhat as a pre-curser to the 401(k),” Gradifi CEO Tim Demello told FOX Business Network’s Maria Bartiromo.
Demello disclosed more details on its first customer PricewaterhouseCoopers.
“PwC as an example has 46,000 U.S. employees and they estimate as many as 15,000 of them have student loans averaging about $35,000. They also recruit about 10,000 people off college campuses every year, so they’ve just put a program together with us where they will pay $100 a month for 72 months into an employee’s plan. So what that does is, that takes that $35,000, which with interest is about $42,000 and take 25% right out of the loan,” he said.
Demello also broke down how it would impact taxes.
“What’s interesting is, right now there’s a tax law where you can do educational assistance -- which is $5,250. So if you take a course, your company can pay for that and you don’t pay any taxes up to that level. There [are] now bills out there circulating that if an employer pays into a student loan account, up to $6,000 -- that will also be tax exempt. So it’s taxable right now but we think in the future it’s going to change.”
Demello also said hundreds of companies have taken interest in the program since it was announced.