Investing in a 401(K) can help ensure that you live a more comfortable life at retirement. Unfortunately, many employees delay their 401(K) spending for years because of a tremendous amount of student loan debt.
Realizing that employees need to start saving early on in their careers, one business has developed a student loan repayment program that ties into employee benefit programs.
Gradifi has developed a new benefit program for employees that helps pay down debt while they work. The program is called The Student Loan Paydown Plan.
Gradifi CEO Tim Demello explains to Fox Business how the program has been helping PricewaterhouseCoopers employees.
“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 adds.
The program also makes tax sense. Demello explains that there is currently an educational assistance rule in tax law that allows for up to $5,250 in savings. If you tax a course, which your company can pay for, you don’t have to pay taxes up to that level.
He adds, “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.”