New employee perk: Paying off student loans
Article By El Paso Inc.
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Source: http://www.elpasoinc.com/news/local_news/article_1f4ff13e-4782-11e6-9279-3fece6cbb319.html
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Eleazar Navar graduated from college this year with $5,500 in student loan debt.
So Navar was thrilled to learn a local company where he had applied for a job was offering a new benefit: student loan repayment.
“When I saw the applications for other jobs, I didn’t see anyone else offering that,” said Navar, 23, an estimator for El Paso-based JAR Construction, who graduated from the University of Texas at El Paso with a degree in civil engineering.
When he got a job offer from JAR, Navar did what many young graduates in El Paso do not – he stayed in El Paso.
“El Paso has so much young talent to offer. A lot of times they leave, and we miss out on that,” said JAR Construction owner Joe Rosales Jr., whose father founded the company in 1957.
Nationwide, the average student debt carried by college graduates has surged. Last year, it was was $35,000. So for many young job seekers, paying off student loans is a greater priority than saving for retirement. And a handful of companies have started offering student loan repayment assistance, including Credit Suisse, Fidelity and PricewaterhouseCoopers.
Public officials and businesspeople in El Paso have long fretted about “brain drain,” saying too many graduates leave the city to find jobs, particularly engineering students.
“Most of the young men and women here – they have their roots here. They don’t want to leave, but there is no other option,” Rosales said.
JAR Construction, which employs 100 people in El Paso, has hired 11 UTEP engineering graduates over the past decade, including two last May. Rosales said he hopes offering the new perk will help them recruit more UTEP grads.
Joyce Wilson, former city manager and current CEO of Workforce Solutions, said she expects to see more companies offer tuition payback and similar perks, as student debt becomes a more pressing concern for jobseekers.
Last year marked a major shift in the U.S. workforce as millennials, the generation that includes adults ages 18 to 34, became the largest generation in the workforce, according to the Pew Research Center. Many are entering the workforce with crushing student loan debt.
“I think (loan payback) will become more of a trend in terms of employer benefits to attract and retain good talent,” Wilson said in an email interview. “At the city, we started the discussion of doing something similar for hard to fill positions where pay might not have been as competitive – accounting and IT for example.”
Richard Dayoub, president of the Greater El Paso Chamber of Commerce, said he had not heard of any companies in El Paso that offered tuition loan repayment specifically, but that more businesses in the city are looking for creative ways to recruit and keep workers. The El Paso labor market has become more competitive as the local unemployment rate has fallen and demand for talent has grown, Dayoub said.
In particular, local construction companies and engineering firms have become very busy as El Paso grows and billions are spent to expand El Paso’s infrastructure, Dayoub said. Since 2013, El Paso’s unemployment rate has fallen from 9.1 percent to 4.1 percent, according to city officials.
What was appealing to workers five or 10 years ago is not necessarily what is appealing to workers today, Dayoub said.
“For a 24-year-old, (tuition loan repayment) has more meaningful value today than a 401(k) plan,” he said.
Child care is also a top priority for many young workers, and another popular benefit are flex plans that let workers use pretax dollars to pay for child care, Dayoub said.
Rosales with JAR Construction said they will pay off Navar’s $5,500 in student debt over the next three years.
“Since we have had initial success hiring UTEP graduates – we are very happy with them and their work ethic especially – we thought we could take it a step further and recruit these young men and woman,” Rosales said
