The City of Memphis has come up with its own student loan assistance program for its employees. The program somehow fulfills the ethos of a bill introduced in February that encourages employers to ease a bit of their workers’ student loan burden of $1.4 trillion.
Memphis Student Loan Reduction Program
The City is the first municipality in the U.S. to offer student loan assistance in the form of monthly loan contributions on top of their workers’ student loan payments. The City hopes this extra contribution will save workers time and money.
Officially known as the Student Loan Reduction Program, this benefit is available for eligible Memphis city employees starting July 1.
The program is administered by Tuition.io, which has a platform for viewing loan contributions, repayment strategies and financing options, among other things.
Eligible participants will receive a monthly contribution of $50 that goes toward the reduction of their outstanding student loan principal.
To be eligible, one must be a full-time, active employee with one-year service with the City.
Loans that are eligible for the monthly contribution are:
- Loans in forbearance, grace period, deferment
- Loans consolidated with someone else, if documented
- Loans that previously received tuition reimbursement
The student loan assistance however is not applicable to:
- Parent Plus Loans
- Loans in collections
- Loans in default
- Loans in someone else’s name
- Loans used to pay for someone else’s higher education
- Educational lines of credit
- Leaves of absence
- Student Loan Debt in America
Per the Federal Reserve’s latest consumer credit report, unpaid federal and private student loans have reached more than $1.4 trillion as of March 2017. This problem is far from academic as it spills over to homeownership, taking a chunk of consumers’ income that could have gone to mortgage payments.
In Memphis alone, student loan debt grew at the rate of 5% vis-a-vis the nationwide rate of 3% per CNBC.
“We are proud to be the first municipality in the country to offer this kind of student debt assistance to our workforce. We view this as an important investment in our employees,” Alex Smith, chief human resources officer with the City, said in a press statement.