Despite receiving a 75% discount to attend school in Happy Valley, one Penn State University graduate is still straddled with $39,000 in student debt.

Within six months, Victoria Gibilterra graduated with a bachelor’s degree in security and risk analysis, landed a job at Aetna Inc. as an IT leadership development professional and moved to Connecticut, then Pittsburgh. Soon, she will begin making monthly payments toward her federal loans on top of her everyday expenses.

Even though Pennsylvania ranks No. 2 for highest average student debt in the country, Gibilterra’s situation isn’t much different from the 44 million Americans struggling with student loan debt, according to the Institute for College Access and Success, a nonprofit that works to make higher education more available and affordable.

However, Gibilterra’s employer will offset her monthly $350 payments with its new student loan repayment program, which starts next month.

Aetna will match eligible full-time employees’ payments up to $2,000 a year with a cap of $10,000 or part-time employees’ payments up to $1,000 a year with a cap of $5,000.

“It’s a very generous amount,” says Gibilterra, who accepted the job offer before the insurer announced the program. “I’m applying for it the first of January.”

See also: Why employers should offer a student loan benefit

The software security analyst recalls sitting with two other millennial coworkers when they heard the news.

“We really freaked out,” she says. “We were all super excited.”

Matthew Clyburn, a spokesman for Aetna, estimates that up to 4,000 employees have received degrees since December 2013 and could participate in the program.

The company’s decision to inaugurate this program reinforces the notion that student loan debt is a national crisis.

Nearly seven in 10 seniors (68%) who graduated from public and nonprofit colleges in 2015 had student loan debt, with an average of $30,100 per borrower, according to the Institute for College Access and Success. This represents a 4% increase from the average debt of 2014 graduates.

Meanwhile, only 4% of employers offered student loan repayment assistance in 2016, up from 3% in 2015, according to a 2016 Society of Human Resource Management study.

Aetna joins a small group of companies, such as PwC, Fidelity and Staples, who make direct payments to participating employees’ loan servicers monthly, a benefit seen by experts as a major attraction and retention tool for millennials.

See also: Staples implements student loan benefit

SoFi, a San Francisco-based online personal finance company, can be added to that list.

The company offers $200 a month to employees without a cap, an uncommon practice as most companies with similar programs cap the benefit around $10,000, at most.

“$100 a month is kind of the default,” says Catesby Perrin, vice president, head of business development at SoFi. “This market is still relatively unknown. Employers want to cap their risk to a certain extent.”

Although SoFi deviates from the standard, the company understands student debt much better than the average employer. SoFi works with more than 600 clients to facilitate student loan assistance, such as monthly stipends and refinancing options, and develop best practices.

Perrin says more than 40 clients will be making contributions to their employees’ student loans by the end of 2016, and he expects to see that number grow.

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“Policy and perception has changed immensely in the last three years,” he says. “Student loans have become a hotter topic in public perception.”

The burden of debt

The 2016 election put a spotlight on the issue and brought it to the national stage.

See also: Benefits innovator spotlight: PwC

On the campaign trail, President-elect Donald Trump proposed an income-based repayment plan that caps monthly payments at 12.5% of a borrower’s income; after 15 years, the remaining student debt would be forgiven.

Trump also spoke about his plans to rewrite the tax code to support tax-advantaged accounts, such as HSAs and dependent care savings accounts.

Employers look maximize every dollar through tax-advantaged plans, and student aid assistance does not qualify for that tax break. Some experts say it’s the reason why student aid assistance, particularly monthly stipends, hasn’t caught on.

“For various issues — tax issues, limited funds — a lot of employers end up not doing it,” says Chris Kardos, principal, Strategic Benefit Advisors, a Boston-based health and welfare benefits consulting and brokerage firm. “The fact that there’s no tax advantage I think is a bit of an inhibitor for employers.”

The benefits consultant says he’s seen “tons and tons of interest, but people are not pulling the trigger.”

SoFi’s Perrin refutes the extent in which employers are turned off by the tax treatment, saying it is “only one metric.”

“Just because it’s taxed, there are network contributions,” he says. “Making it more compelling for employers by changing the tax treatment would wildly accelerate the rate of adoption.”


The technology challenge

There are other issues, though.

See also: 5 reasons student loan repayment is the next big benefit

“The main issue the clients are looking at, aside from the money, is who has the best tech to administer this program,” Kardos says. The benefits professional says companies want to avoid the internally-focused administrative burden and are looking for a vendor that has the best platform.

Employers should look for infrastructure similar to SoFi’s platform, which Perrin says eases the process of collecting names and loan information from enrolled employees, validating their identities, matching employees against eligibilities and paying the student loans. Like SoFi, the vendor should also be able to offer strategies for determining eligibility.

Kardos says HR managers also worry about backlash from older or ineligible employees for what can be perceived as diverting benefit money away from other programs.

“It’s an HR defensive position, but in reality, it might be overblown,” Kardos says.

Perrin agrees, noting that one of Sofi’s clients created a new line item for a student aid assistance program and ran an open enrollment for the benefit. The client simply divided the budget line item by the number of employees who enrolled. They did not receive any backlash from other company employees.

“At the end of the day, no benefit is perfectly equitable,” Perrin says.

Other employers are considering diverting their 401(k) match to employees’ student loan payments, especially those who can’t afford to contribute to their retirement savings at all.

See also: Student loan repayment programs are ‘the next 401(k)’

Most employers, though, circle back to the tax issue, especially as healthcare spend continues to increase and benefit professionals need to “earmark as many available dollars” as possible, Kardos says.

It seems employees might have to wait for student loan payments to become the new 401(k) contribution, but employers are still diligent to offer some kind of student aid benefit.

Those companies are turning to refinancing, where they can work with an employees’ loan servicer to increase the length of time to pay off the debt or lower the interest rate.

Employers are also making agreements with some major universities, along with online or regionally-based universities, to negotiate a discount for their employees to help pay off student debt, says Ruth Hunt, principal in the engagement practice for Xerox HR Services.

Perrin says employers should go the extra step and offer a refinancing benefit for one convincing reason: “It’s free.”

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