PwC’s student loan benefit price tag: $25 million and counting
PricewaterhouseCoopers has paid nearly $26 million toward eliminating employees’ student loan debt since launching its repayment benefit in 2016.
The accounting and consulting firm was one of the first employers to tackle workers’ student debt by adding a pay down program for employees. The benefit pays $100 per month, or $1,200 per year, toward workers’ student loans. As of March, about 8,700 employees have signed up and 8,069 are receiving payment, the company told Employee Benefit News.
“Even employees with no student loan debt tell us they are proud of the pioneering benefit,” says Michael Fenlon, PwC’s U.S. chief people officer. “They are proud the firm is taking on such a complex, important issue in our society, especially one they see negatively affecting their own friends, family and colleagues.”
PwC estimates the program reduces employee loan and interest obligation by up to $10,000 and shortens payoff time by roughly three years. The company offers the program though Gradifi, a student loan benefit provider that also works with employers including Honeywell, First Republic Bank and Peloton.
“It’s amazing to see that three years later, PwC has contributed [more than] $25 million to its employees’ student debt,” says Gradifi CEO David Chang, adding that PwC is the company’s charter customer. “This just shows how these benefits actually change the lives of those burdened with massive student debt. We’re excited to see more of these types of milestones as more employers extend the SLP benefit to their employees.”
Even though student loan debt in the U.S. has ballooned to nearly $1.5 trillion, just 4% of employers offer student loan repayment benefits to workers, according to data from the Society for Human Resource Management. While the benefit generates buzz among workers, many employers are still hesitant about the cost, says Peter DeBellis, total rewards research leader at Deloitte.
“A program like this is a personal decision for an organization. It depends on your demographics, how your employees are feeling, what your industry is, what your financial well-being profile is,” he said speaking at the WorldatWork Total Rewards Conference in May. “It’s not something to do lightly. It can have some serious financial ramifications, so it’s something to step in thoughtfully if you are thinking about going down this road.”
Regardless, some employers have been investing in student loan repayment benefits. For example, CSAA Insurance, Travelers Insurance and Advance Financial all offer some variation of the benefit. Others, like carmaker Fiat Chrysler, offer employees student debt refinancing options.
PwC’s Fenlon says the issue of increasing student loan debt has reached a “tipping point” and is now overwhelmingly impacting professionals. He calls the benefit “game-changing” for employers.
“It’s affecting when they are starting families, buying homes and how they’re saving for retirement,” he says. “By providing the student loan benefit, PwC is helping staff be better prepared for their financial future.”