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I don't see this decision using "other people's money" to repay student loans. From what I read in the article, the employee would earn match benefits up-to-bu
by jakamau 8y ago
I don't see this decision using "other people's money" to repay student loans.
From what I read in the article, the employee would earn match benefits up-to-but-not-exceeding normal limits for money they put in towards their student debt and 401K retirement.
e.g. Employee A has no student debt and contributes $5,000 to their employer's 401k program - qualifying them for a $5,000 employer match to their retirement.
Employee B has student debt and contributes $4000 to their student debt payment and $1,000 towards their employer's 401k program - qualifying them for a $5,000 employer match to their retirement.
- gowld 8y agoCorrect, but it's still promoting excessing borrowing, which causes price increases. The "other people" now becomes future-you: "throw away your retirement to pay for overpriced colleges". Cash subsidies are usually bad, because the cash gets siphoned off by monopolists or near-monopolists. Instead the government should be directly purchasing and distributing in-kind, and using its power to negotiate a good price. This is how Medicaid works and how public colleges work.
- MBCook 8y agoThat was my reading too. I’m just assuming this is going to be a standard benefit pretty fast. And now instead of saving for retirement at a youn age (compound interest is a very powerful thing) and instead use this benefit to pay off their loan. But I worry people will just interpret this as ‘your job will help pay off your loans’ and this be willing to take on more/bigger loans than they would otherwise. So now they’re on the hook for more and don’t get the retirement benefit they could have elected for. It can be used well, I worry it won’t be.