Fidelity had announced a new employee benefit for their employees. They announced that over 5,000 employees were now eligible for the benefit, that provided up to $2,000 per year towards student debts up to $10,000. This addressed a very real financial concern that impacted their employees directly.
As we all know, student loan assistance is far from a common benefit and it seems to be steadily popping up in different sectors. Apart from large companies like Fidelity, the federal government is offering repayment assistance to certain employees. Even if you are not one of those 5,000 employees who are getting this assistance benefit, there is some good news for you too. As more and more companies offer repayment assistance, this trend will continue to grow. When employers will look to hire talented resources, this perk might get attention and make some difference.
Table of Contents
- Understanding the burden of debt
- What are Tax Benefits?
- Fidelity Student Debt Employer Contribution Program
- In Conclusion
Understanding the burden of debt
The repayment assistance programs are provided by companies to help out their employees. It is a good idea to understand about student loan repayment and what plans are available to the student loan borrowers. This word of benefits will help understand the underlying burden and difficulties in paying off the student loan debts. The amount of financial impact that a student loan has today was way different years ago. The more people can realize the burden of student loan debts, the more programs will be put in place to help out the borrowers.
What are Tax Benefits?
Many benefits come with your employment and can help you save from tax deduction. Many healthcare plans offered by your employment has a tax advantage. If the tax savings for employee benefits are continued on student loan debt assistance, then it would be of great assistance for student loan debt holders.
Creating a tax benefit as such can create a situation where everyone comes out as a winner. Borrowers benefit the most because more employers could offer the benefit. Employers currently providing the benefit would save money and other employers might start offering the benefit because of the lower cost. The government could benefit from creating a tax-advantaged student loan program. Since they are the largest lender of student loan debt, programs that can help the borrowers to pay back their debts means that the trillion-dollar debts are paid back timely.
Fidelity Student Debt Employer Contribution Program
As per the official website of Fidelity, this program was created by Fidelity for leading businesses to attract and retain top talents. Research shows that providing a student loan assistance option to potential candidates is a powerful tool when inspiring talent to join a company. Participating companies find the game-changing new benefit helpful while recruiting and retaining top talent since it has a novel appeal. This benefit enables employees to pay off the debt faster, allowing them to focus on other savings priorities.
Some of the organizations teaming up with Fidelity to offer the benefit include the following:
Hewlett Packard Enterprise (HPE): It is headquartered in Palo Alto, California, is a global technology leader focused on developing intelligent solutions that will transform enterprises from data-rich to insights rich. Its comprehensive portfolio of products and services allows customers to harness, analyze and store critical data across an enterprise.
OCC (The Options Clearing Corporation): It is headquartered in Chicago, IL, is the world's largest equity derivatives clearing organization, dedicated to promoting stability and financial integrity in the marketplace by focusing on sound risk management principles to reduce systemic risks, increase transparency and provide capital efficiencies for investors and market participants.
Ariel Corporation: It is headquartered in Mount Vernon, Ohio, is the world's largest manufacturer of separable reciprocating gas compressors, which are used by the global energy industry to extract, process, transport, store, and distribute natural gas.
New York Air Brake: It is a New-York based leader in the rail industry, providing railroad brake and train control systems, products and services to rail customers worldwide.
Millennium Trust: Headquartered in Oak Brook, IL offers a wide range of specialized custody and retirement solutions to advisors, financial institutions, businesses, and individuals. The company, which has more than $23 billion in assets under custody, was recently recognized for its strong Millennial culture.
Fidelity is now administrating the student debt program to its employees. Fidelity Investments began offering a student debt benefit in 2016, becoming one of the first companies to help employees ease the pressures of student debt.
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When Fidelity started this program in 2016 for its employees, it was the only company providing such a benefit. At that time, it hardly made any difference from one company providing such benefits. But as time went on, this positive step was accepted by and large. And now, to date, more than 8,900 Fidelity employees have received a benefit, paid directly to their loan service provider. Fidelity employees have saved approximate $22.5 million in principal and interest and have shaved off 34,625 years of loan payments.