The other day, I read a Bloomberg article which caught my eye. Apparently, more and more companies are starting to help employees pay off student loan debt. In addition to health options and 401(k) matching, this fringe benefit makes a benefits package even more attractive to the group dominating today’s workforce: the millennials.
Speaking as a member of this group, and one who has almost $30,000 of student loan debt to her name, I feel I need to get some things out in the open before I go any further.
I went to an expensive college knowing it would be expensive. While I did get a small scholarship, it was not remotely enough to cover my costs, which were nearly three times the amount of my hometown’s in-state university. But still, I made my choice knowing full well the havoc it would wreak on my adulthood finances. I chalked it up as a “future Erin” problem, and man, was I right.
According to the Bloomberg article, a recent study shows 80 percent of young people want to work for a company that helps alleviate student loan debt. It’s definitely an enticing offer, and one which is garnering more attention than retirement benefits. Loan payments come every month, while retirement is decades away (another problem for “future Erin”).
To me, retirement does seem far off — and it is. In fact, I didn’t bother with a 401(k) plan while at my first job because I needed take-home money for real bills — including my student loan payment — despite my employer offering unlimited contributions and a 10 percent match of my salary. It wasn’t until my husband pointed out my misstep that I even cracked my employee benefits book to find out how to enroll.
As I randomly selected stocks and associated percentages and skimmed research citing past performance, I whined about how this was the reason I opted for an English major over a business degree. My husband was quick to chide me, ever so eloquently pointing out, “401(k) investing is like fantasy football. BUT FOR LIFE.”
For him and many others who walked away from college with a debt-free degree, money, savings, and investing is a game. For me and countless others, it’s a very real balancing act. Sure, a 401(k) is good for the “later” in life, but even small contributions still mean less take-home cash in the present. When you’re looking at hundreds of dollars a month in student loan repayments, it’s hard to justify planning for the “later” when the “now” is pretty bleak.
While my student loan payment is manageable today, there was a time it wasn’t (and it won’t be again someday, when the interest chicken comes home to roost). So when Bloomberg reports Fidelity joins the growing bandwagon of companies offering debt assistance, providing $2,000 a year up to $10,000 total toward student debt, my interest piqued. To put that in perspective, $2,000 a year would cover 78 percent of my annual student loan payment. A tax-deductible drop in the bucket for them? Yes, but a win-win for “later” and “now” Erin.
I’m hoping my categorization of Fidelity as “bandwagoning” will act as a prophecy and make Bloomberg’s prediction come true. Maybe one day, my student loan debt won’t be quite as crippling due to expanded benefits packages. Until then, I’ll keep trying to garner the federal loan rep’s sympathies by crying whenever we speak in an effort to lower my monthly payment.