Will Google’s Student Loan Repayment Benefit Start a Trend?

Google plans on helping its employees pay off their student loans at a faster rate. That’s great for Google employees, but it could also have a ripple effect on the tech industry at large, which has copied various Google benefits throughout the years in order to better compete for talent. 

“Today, we’re introducing a student loan repayment program for all Googlers in the U.S.,” read the new note on Google’s corporate blog. “Starting in 2021, Google will match up to $2,500 per Googler per year in student loan payments to help them pay off their student loans faster, allowing them to save money to use in other ways, whether it’s purchasing a new home, starting a family, or investing in a 401(k). We plan to expand the program globally over time.”

Google isn’t the only tech firm that offers some kind of repayment benefit. Nvidia, for example, allows its employees to apply for loan reimbursement (up to $6,000 each year). Google is a particularly notable company to watch when it comes to benefits, though, because other companies sometimes follow its lead. For Silicon Valley titans such as Facebook, replicating a rival’s policies is often the cost of doing business (and hiring from the same pool of highly-skilled technologists); for smaller firms all over the country, offering a Google-like benefit can help attract top talent.

This is also a benefit that technologists really want; this year’s Dice Salary Report revealed that some 48 percent of them are interested in college tuition reimbursement, roughly on par with maternity/paternity leave (45 percent) and paid vacation (44 percent) and well ahead of 401(k) matching (30 percent). However, only 25 percent of employers said that they offered such a reimbursement benefit. 

Why isn’t such reimbursement more popular among employers? Taxes might have something to do with it: Right now, such payments aren’t deductible, meaning it could quickly become an expensive benefit, especially for businesses with slim margins. (Employees would also have to pay taxes on the assistance, which would be treated as income, but that’s another story.)

Congress has been examining whether to help employers help employees with their student loans. Last year, U.S. Representative Scott Peters (D-CA) introduced H.R. 1043, the Employer Participation in Repayment Act, which offers tax benefits to employers that assist employees in paying off student loans; U.S. Senator Mark Warner (D-VA) introduced a similar bill in the Senate the same year. But neither of those bills have made legislative headway since then. 

For a deep-pocketed mega-firm like Google, it’s less of a financial issue to launch such a repayment program. The big question is whether more tech firms will step up to offer something similar; it might hinge entirely on Congress and tax breaks.  

One Response to “Will Google’s Student Loan Repayment Benefit Start a Trend?”

  1. $2500 reimbursement for a whole year! I am so not impressed. Let me try to explain.
    After I finished getting my B.S., and my M.S. in Computer Science, I had a lot of student loan debt. There weren’t very many options, despite all the hype that had come out of Washington DC about repayment plans. I thought I had lucked-out because my interest rate had remianed at under 3% for several years, and that a lot of terms had been based on the year of my highschool graduation, which was quite awhile before. I soon found myself with an impossible debt, where the ‘regular’ payments were expected to just be over $1,000 per month! Now, after working with the loan servicing company the Fed’s assigned this to, I am on a ‘sliding-scale’ plan based on my income, and after 25 years, the remaining balance can be forgiven. The ‘sliding-scale’ says that if my income is at or below the Federal Poverty level, my monthly payment is $0.00 (zero). If I make Federal-Poverty+$1.00, my minimum monthly payment is $1,000 again. And if I miss renewal, which must be done annually, I have to pay at least 1 month of standard payment (just over $1,000) as part of the qualification to get back on the plan and start the 25 years all over again. With that kind of incentive, I’m not inclined to accept any work unless it is particularly lucrative. The balance has started jumping recently, and what had hovered for several years at about $90,000 total debt, suddenly jumped to $145,000 in just one year.

    You know, initially, I was encouraged by the university’s financial aid officers to borrow as much as I can because I was in a high-paying field where I could expect starting pay in the $100,000+ range, so my initial thought was to continue living like a student-pauper for 1-2 years and pay off the student loan early and be done with it. Sadly, that hasn’t happened, and the industry doesn’t like ‘older’ workers. And convenience stores don’t like hiring ‘overqualified’ people, either. THEN you add-in the ‘affordable health care act’ where it was wanting almost $1,000 per month for health ‘insurance’, and at my low-level of income I didn’t qualify for any government subsidy to make the payments ‘a manageable amount’ so I have to forego the ACA completely, and fill-out extra paperwork at tax time to document my exception, even thought the ‘penalty’ has been removed. And I’m in that strange income level where I shouldn’t have to even file a tax return annually, except I need the form to re-qualify for my student loan payment plan.

    So from my point of view, a max. $2500-per-year on a $12,000+ per year payment requirement is a bad joke, among a bunch of bad jokes.