By Elisabeth Buchwald
Google will try to improve its employees’ financial well-being by paying off some of their student-loan debts, the company said Thursday.
Google said it 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).”
The perk will only be available for full-time U.S. employees, beginning in 2021. “We plan to expand the program globally over time,” John Casey, director of global benefits at Google (NAS:GOOGL) (NAS:GOOG) said in a statement .
“We’re hoping this student loan repayment program gives our workforce some relief from student loans and helps them build more financial stability over the long term,” he added.
The company acknowledged in a blog post announcing the program that student-loan debt disproportionately affects “ women and communities of color,” with Black borrowers saddled with more debt on average than their white counterparts.
Google declined to comment further on the announcement. Google’s parent company Alphabet, Inc. had 123,000 employees as of March 2020.
Americans collectively owe $1.5 trillion in student-loan debt and the average monthly loan payment is between $200 and $299, according to Federal Reserve numbers.
Google is not the first company to help its employees pay off student loans. In fact, loan repayment has become a more popular perk as employers seek to recruit and retain top talent.
Some 8% of U.S. companies offer student loan contribution benefits as of 2019, according to a survey conducted by the Society for Human Resource Management, a professional organization. That’s doubled from 2018.
The growing popularity of the perk has created an industry of middlemen that provide the technology and platforms employers use to help pay off their workers’ student loans.
During the pandemic, Americans with federally held student loans have been allowed to pause payments on their loans under the $2 trillion stimulus package, known as the CARES Act, that Congress passed in March.
Initially the pause of student loan repayments was set to expire at the end of September, but it was recently extended through the end of 2020.
However, approximately $165 billion in federal student loans are ineligible for the payment pause, as well as privately held student loans.