By Charlie McKenna, Staff Writer
Every college student worries about debt. Even if you have great scholarships, most grads are saddled with a whopping average debt of $35,200. That might not be a scary thought for those who are perfectly organized, with comprehensive repayment plans and corresponding jobs lined up after graduation. But for the rest of us, this thought is cripplingly scary, especially considering that we’re going to be expected to go into the workforce as entry-level employees with an average salary of $46,000.
To make matters worse, many current students and recent graduates fall above the average debt level, especially private school students. And with the economy still recovering, it’s doubtful that all of us will be able to find “average” jobs; many will not reach the annual salary of $46,000. Most of us will have to pay for utilities, housing, and groceries on top of paying off loans, leaving the daunting sum of college debt still as scary as ever.
A potential solution
This issue isn’t news. It’s something millennials have been concerned about for years now. However, in order to attract some of the most promising graduates, some employers are now offering a new benefit to attract talented young hires: debt payment benefits. These firms hope to attract an increased number of qualified candidates by offering this special perk.
Right now, the idea is still fairly cutting-edge. Several businesses are jumping on board, including Fidelity Investments and Natixis Global Asset Management SH. Natixis has promised to contribute up to $10,000 a year to help student debt for employees who have been with the company for at least five years. These debt payments are aimed to foster loyal employees, and have successfully garnered some buzz for their companies. Some analysts predict that other companies will follow suit. Although right now only 3 percent of companies offer student debt repayment, according to a survey by the Society for Human Resource Management, it should become considerably more widespread in the next five years.
It seems like a good update to fit the younger workforce’s needs. We need to handle our debt problem, so here’s a good practical solution. It’s a win-win. Debt-ridden millennials get the benefit of help with college debt and these companies will be able to take their pick of the flood of qualified applicants trying to get in on the benefit.
Some millennials are not warmly embracing this new trend, however. For starters, college tuition is steadily going up. Are these companies going to compensate for rising rates? Also, instead of giving a benefit, some have articulated a desire for a simple raise. Companies are offering more and more complicated benefit packages of this type, but some of us are liberal arts graduates. Let’s be real, we would rather have the straight-up raise. Many workers justifiably want to see the fruits of their labor, and control their own money. There is a certain mentality of benefits, which separates the worker from his wage. He is only a third party in his earning; as the company and the bank or school negotiate, it's almost as if it wasn’t his hard-earned money at all. The money is never seen, but monitored by the corporation every step of the way. Some of the more avid readers of Marx might be bothered by this.
However, for the most part this trend seems to be on the rise. Despite some issues with it, this is a wonderful example of innovation in the economy. It’s the market once again fixing its own problem, turning needs into incentives and problems into solutions.