Memphis city officials announced this week that the city will start helping employees pay off their student loans.
“We’re proud to announce today that we’re the first city in the country to add a student debt repayment assistance program to our employee benefits package!” read a post Thursday morning on the city government’s Facebook page.
By Friday afternoon, the post had received around 100 reactions, with many giving the announcement hearts and thumbs-ups. One person commenting applauded the city for “evolving.” But not everyone was pleased
“It’s always a great idea to some when the taxpayers [foot] the bill,” wrote one commenter.
The city set aside $400,000 in the budget for the 2018 fiscal year to help pay off its employees’ student loan debt, according to the Memphis Business Journal.
Memphis has a contract with Tuition.io., a student loan management company in Santa Monica, California. The company will direct the money from the city to student loan companies. The city will contribute $50 a month to participants’ student loan principal payments and an additional $7 per member monthly fee that will go to Tuition.io. A one-time set-up fee under the two-year agreement cost $50,000.
“Individuals will still need to make monthly student loan payments, but this helps to accelerate their payoff amount by contributing toward taking down that loan principal,” said Alex Smith, the city’s chief human resources officer.
Smith told the Memphis Business Journal the goal is to make the city a more attractive place to work for young police officers, firefighters and paramedics burdened by debt.
The incentive is also seen as a way to retain employees who want to pursue degrees, especially advanced degrees such as an MBA, while working. Memphis already has a tuition reimbursement program, which contributes $3,000 a year toward tuition costs for employees attending college. But employees take out loans to cover the full costs.
Yeah. That might take away good money that could be put to better use. Corporate welfare for example…
Sounds like a big mistake to me.