Google has jumped into the discussion of the student loan crisis.
Google has unveiled a student loan repayment program. Starting in 2021, employees will be able to get up to $2,500 in matching student loan payments from Google.
The announcement is excellent news for Google employees, but it could impact many more borrowers.
Expanding Employer Contributions to Student Loan Payments
Google joins a growing list of employers offering a student loan benefit.
Even though this particular benefit will only apply to Google’s 123,000 full-time employees, the program could potentially help many others.
When a big company like Google announces a student loan repayment program, it can have a big influence on the marketplace. Other companies may decide that they need to create a student loan benefit to compete.
Google is betting that student loan help will help attract talent.
Student Loan Help from Congress: The United States Congress is one of many employers that offer a student loan assistance program. Congressional staffers can get up to $500 per month towards student loan payments.
Creating an Incentive for More Employers to Help
As more employers offer student loan assistance, support will grow these contributions to receive favorable tax treatment like a 401(k). Legislation of this nature has already generated bipartisan support.
Google joining the list of companies offering a student loan benefit means one more big company that would benefit from a favorable tax treatment of student loan help.
If legislation is passed to help facilitate student loan help from employers, it will encourage even more companies to provide student loan support.
It isn’t hard to envision a future where student loan assistance is a standard employee benefit like a 401(k), medical, and dental insurance. Today’s announcement helps bring that future a bit closer to becoming a reality.
Getting the Most from Employer-Sponsored Student Loan Help
Like most other employer plans to help with student loan payments, Google matches payments.
Some employers only match payments based upon the required minimum monthly payment, while others will match extra payments.
Because the terms of various employer plans vary, student loan borrowers should carefully review their company plan and find ways to optimize their benefit.
Does Google’s Student Loan Benefit Help Solve the Student Loan Crisis?
Even if the Google policy led to large-scale adoption of a student loan benefit, the student loan crisis would continue to be a major issue.
At the core of the student loan crisis, college is too expensive. Students and parents need to borrow more money each year to pay for school.
An employee benefit program has the same flaw as most other “solutions” to the debt crisis. It is a bandaid. A proper fix to the student debt crisis will have to address the fact that college costs have spiraled out of control.
Employee benefits, repayment plans, and even student loan forgiveness programs help the victims of the crisis, but they don’t solve the problem.
Obviously, Google isn’t trying to solve the student loan crisis single-handedly. The Google repayment program is a tool to attract top employees.
If nothing else, it is nice to see that another large company now recognizes the severity of the student loan problem in the United States.