Anyone not living in a cave has seen the grim statistics on U.S. student debt. About 40 million Americans, or almost three-quarters (71%) of recent college grads, owe a staggering total of $1.3 trillion.
So imagine for a moment that you were a bright young person, on the hook for the average student debt of slightly over $30,000, weighing two appealing job offers. Let’s say they’re comparable in every way, with just one difference: As part of its benefits package, one employer will pay $1,200 a year toward whittling down the balance on your student loans. The other won’t. Which offer would you take?
PwC is betting it’s a no-brainer. Starting next July, the accounting and consulting giant will begin lightening the debt load for associates and senior associates by $1,200 a year for the following six years.
That amounts to $100 a month, “which is more than it sounds like, if you look at the time value of money,” notes Michael Fenlon, PwC’s U.S. talent leader. Someone with a $35,000 debt at 5.84% interest, for example, ends up saving about $10,000, and being debt-free two years and two months sooner.
Fenlon says PwC is taking this step in part because PwC hires about 11,000 student interns and new college grads annually. Sometime next year, he predicts, 80% of the firm’s 45,000 employees will be millennials, “and this matters to them.” The program also gives a boost to PwC’s diversity efforts, since “some [minority] communities are disproportionately impacted by student debt.”
Then too, helping to ease the $1.3 trillion drag on the U.S. economy fits with PwC’s mission of “solving social problems,” Fenlon adds. He says it’s not clear yet what the loan-repayment plan will cost—“It depends on how many people sign up”— but it’s consistent with other socially conscious programs the firm has launched, such as PwC’s support for stepped-up teaching of financial literacy in public schools (price tag so far: $190 million).
There’s no doubt that PwC hopes the move will give it an edge in wooing top talent, especially in-demand millennials. It should help with retention, too. Gabi Gutierrez, for instance, graduated from Virginia Tech last spring and is now an associate in forensic services in PwC’s McLean, Va., office. Partly to save money so she can pay off her student loans, Gutierrez lives with her parents who “think it’s great that I’ll be debt-free quicker,” she says.
Will this inspire her to stay with PwC longer than she otherwise might? “I like what I’m doing,” Gutierrez says. “But yes. This is a definite plus.”