February 2018 update: The Memphis, Tennessee, student loan assistance benefit discussed below is no longer being offered. But you can find student loan repayment assistance programs to help you better tackle your debt.
Ever wished you had a fairy godmother who paid your student loans every month?
For government employees in Memphis, that wish is coming true — sort of. Yesterday, the city announced a student loan assistance program for its employees. Here’s how it will work.
What you need to know about the Memphis student loan assistance program
“As far as we can tell, there’s no other municipality offering this type of benefit,” Memphis’ Chief Human Resources Officer Alex Smith said in an interview with Student Loan Hero.
“It’s a complement to what we’re already doing: looking at new ideas and new ways to solve different issues in the city.”
According to its human resources page, the city will contribute $50 per month toward employees’ student loans — with no lifetime limit. The Student Loan Reduction Program kicks off July 1, 2017.
To qualify, you must be an active, full-time employee who’s served the city for at least one year. The benefit is only triggered after employees pay the minimum on their loans. Tuition.io will manage all payments.
Both federal and private loans are eligible, with the following exceptions:
And though $50 per month may not sound like a lot, that’s an extra $600 per year on your student loans.
Say you have $35,000 in loans at a 5.70% interest rate; that extra $50 per month would allow you to pay off your loans nearly a year and a half early and save $1,749 in interest.
We certainly think that’s worthwhile — don’t you? To determine exactly how much a student loan assistance program could save you, use our student loan prepayment calculator.
Why Memphis is providing student loan assistance
A main driver behind the Memphis student loan program is to attract and retain talent.
When Smith was appointed in January 2016, she immediately held town hall meetings and conducted an employee survey.
“We’ve been on an 18-month journey looking at different ways to enhance the value proposition for prospective employees, as well as to retain current employees,” Smith said. “We quickly realized we had a recruiting and retention concern — particularly for police and fire.”
Although the city already offered a tuition-reimbursement program of up to $3,000 per year, it didn’t help with student loan debt. And, as Smith explained, “We knew our workforce was looking for additional support.”
Their innovative solution? Student loan assistance.
So far, the feedback has been incredibly positive. More than 100 people signed up on the day the program was announced. It’s also received considerable press coverage.
“When you do these things, you do them because you believe they’re the right thing to do,” said Smith. “We know this is an important issue to our employee base — but it’s exciting the news wants to talk about it, too.”
For Smith, it’s also a personal victory. A recent transplant from the private sector, she’s found public service rewarding and hopes this program will encourage more people to follow suit.
“We are looking to be competitive and show people that public service is a viable option for their career,” she explained.
More employers offering student loan assistance
Although Memphis might be the first city to offer this benefit, some private employers have been in the student loan assistance game for a while.
In 2015, 4 percent of employers offered the benefit, according to Willis Towers Watson. That number is expected to reach nearly 20 percent by 2018.
Meanwhile, a 2016 Student Loan Hero survey found that nearly 40 percent of borrowers believe student loan assistance is a “very” or “extremely” important job benefit.
Here’s a small selection of employers offering student loan assistance programs:
- Aetna: $2,000 per year, with a lifetime maximum of $10,000
- Fidelity Investments: $2,000 per year, with a lifetime maximum of $10,000
- PricewaterhouseCoopers: $1,200 per year, with a lifetime maximum of $10,000
Why student loan assistance matters for you
We don’t need to tell you that student loans are a huge financial burden.
And since most of us went to college to advance our careers, it makes sense for employers to help us repay that investment.
Because governments are often known for their red tape — not their innovation — this is great news for job seekers and student loan borrowers alike. If a city like Memphis is willing to offer this unique benefit, other public and private employers may soon follow suit.
Keep an eye out for employers that help with student loans, and if you’re happily employed, ask your employer if they would consider hopping on board.
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
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2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
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