Streaming media company Hulu is teaming up with student loan repayment provider Tuition.io to offer relief to its employees plagued by college debt obligations.
Starting this summer, Hulu will pay up to $1,200 a year per employee to match their student loan payments, says Taunya Post, Hulu’s director of human resources operations.
The idea came from examining the benefits Hulu offers to other employees. In the past, the company has increased its parental leave benefits “because we have a lot of team members in their “baby years,”” explains Post. The company looked at other employee life event cycles and decided to offer a student loan repayment benefit.
“We estimated that 15 to 20 percent of our team members would benefit from this. So far, 12 percent has signed up,” says Post. Of those, the majority are younger employees who have an average monthly repayment of $300.
Hulu requires a bachelor’s degree for most of its positions. “This can help Hulu differentiate and be a leader to attract and retain the best quality candidates we can get,” she says.
Tuition.io will work with Hulu to oversee its student loan repayment benefit plan.
“We have a flexible platform — this is our advantage,” says Tuition.io CEO Scott Thompson.
A growing problem
Americans now owe more than $1.52 trillion in student debt, versus $619.3 billion 10 years ago, according to data from the Federal Bank of St. Louis. Collegedata, a high education advisory site, reports that the average tuition is $34,740 at private colleges and $9,970 for public colleges. And tuition has grown 35% in the last decade, finds The Center on Budget and Policy Priorities.
College debt affects employees’ decisions. “They question if they can afford to keep working where they are working while paying back their student loans,” says Thompson. “Student loan debt grows 4 to 6 percent each year. More employers want to help their employees than ever before.”
Tuition.io, whose customers include Live Nation, Estee Lauder Companies, HP and Staples, has seen an increase in the number of clients since the firm began offering college debt relief services two years ago. “It is a number of industries, not just Silicon Valley,” Thompson says. “Student debt is a problem in every industry.”
Thompson says participation in other employee benefits programs such as 401(k) plans has been diminishing, with fewer than 60% of eligible employees participating in such programs. He attributes this to employees’ fear of college debt.
“People that do not participate are younger because they cannot imagine saving for retirement until they are done paying their student loans”” he says. “This is the next generation of workforce.”
