Goodly replaces office perks with student loan repayment | Hacker News Reader

Goodly replaces office perks with student loan repayment

techcrunch.com

41 pointshemantv45 comments

You know what would be great? Someone should combine this with 401k contributions/matching, and make it opt-in by default.

Let's say everyone gets, say, $250/month ($3000/year). If you have student loan debt, it goes to repay that first. If you're done, it goes to your 401k first, and then after that it goes into After-Tax 401k. If you can afford to contribute from your paycheck, then that additional amount gets matched at, say, 100% up to 1/3rd of the 401k limit, and 50% up to 2/3rds, both for the loan repayment, and for 401k saving.

Literally implement the /r/personalfinance flowchart as an auto-opt-in-perk.

(That said, I strongly believe folks should pay down credit cards before making above-minimum-payments on their student loans, since credit cards typically charge more interest.)

Would love to do this but you can't discriminate in 401(k) contributions based upon other benefits.

Certainly worth looking into.

Why is this better than giving employees a $1200 higher salary and saving on the $6/mo fee? I understand that people are irrational and like benefits like this, but is there a tax benefit too?

Giving employees a $1200 higher salary would not lead to an article in techcrunch on hacker news.

Not everyone has student loans (I don't, my parents might be too nice) so it gives them a way to make it look like they're giving everyone a really great deal without having to give it to everyone (just a guess.)

Raising everyone's salary serves as a permanent increase in compensation. It's very difficult to back-pedal from a salary increase. Other perks, which may boil down to monetary compensation, can be added/removed at will with far less push-back.

I vaguely remember a story one time about google (or microsoft) and towels that an old manager told me. But I can't remember what it was. :(

Oh god. The towels. That may have been the longest thread on Mini Microsoft ever. It was talked about for weeks.

They saved $100,000 on towels and how many developers stood around the water cooler for hours complaining about it? I bet they lost more than that in labor costs.

Microsoft has showers for people who bike to work with fresh towels provided. HR tried to remove that perk - probably thinking nobody would care because only a few people used it.

Turns out a lot of people cared.

>Raising everyone's salary serves as a permanent increase in compensation. It's very difficult to back-pedal from a salary increase.

Even with google chipping in aren't we talking a decade or more to pay off a student loan? What percentage would even still be at google by then? For all practical purposes it seems like a permanent increase. Is it more about weird accounting?

It looks like this could perhaps be categorized under "educational assistance", saving both the employee & employer taxes. Essentially you'd be able to pay back your student loans pre-tax, rather than post-tax.

If that’s truly the angle then the IRS is going to have a field day with this as “educational assistance” is meant to incentivize new spending.

Currently, that is not true, but bills have been introduced in the House and Senate to create such an exemption.

1. https://www.scribd.com/document/399496280/116-Congress-Emplo...

2. https://www.congress.gov/bill/116th-congress/house-bill/1043

Perks in lieu of cash have a history that goes back to much more progressive tax structures.

I don't know that they always work out that way these days, but the benefits also represent something they can claw back later. Taking away a small perk and giving you a shitty raise gives them an overall cost reduction relative to inflation. Cutting your salary is much more overt.

> Why is this better than giving employees a $1200 higher salary and saving on the $6/mo fee?

It is better, from the employer’s perspective, because it is a new way to slide age discrimination under the radar.

How is it age discrimination? There are tons of people in their 40s and 50s still paying off student loans.

But the percentage of people who do decreases with age.

"Looking at the age group breakdowns from the Federal Reserve Bank of New York, there are more borrowers under 30 years of age than there are in any other age bracket." https://www.valuepenguin.com/average-student-loan-debt#age

I'm glad I asked this question, because there's a lot of interesting data in response. If you look at the long-term trends in the data, student loan debt is exploding in every age group in America.

> Student loan debt for borrowers 60 and over has increased by 1,256% since 2004

And the end of the graph shows that the number of borrowers in each cohort is roughly the same size as the the number in a younger cohort ten years ago. Some of this is population and college admissions growth, but it also suggests that student loans are becoming a permanent condition, not something you expect to pay off.

I acknowledge that it's age discrimination to offer this benefit (in isolation) for now, but as time goes on that will no longer be the case. The system is set up so that you need a degree to get a job, and you need to work until retirement to pay off the degree to get that job. Unless you're lucky enough to come from a family with wealth, of course.

> I acknowledge that it's age discrimination to offer this benefit (in isolation) for now, but as time goes on that will no longer be the case.

Well, yeah, once the current student lending system collapses or is abolished in the next decade or so, the age dynamics will probably reverse temporarily if a general forgiveness isn't part of the resolution.

But then, offering the benefit won't be as attractive.

> How is it age discrimination?

The share of the employment pool with student loan debt is much lower over 40; it's a benefit focussed on the younger.

> There are tons of people in their 40s and 50s still paying off student loans.

Not nearly as great a proportion as those under 35.

https://www.sofi.com/learn/content/average-debt-age-2018/

My employer started a student loan repayment program last year and I was overjoyed! Until I found out you could only apply within three years of graduation.

Does it have to be the same graduation for which you incurred the loans?

That I don't know. I assumed it is the most recent graduation. I don't think they check the loan dates.

You could probably graduate from somewhere fairly quickly and cheaply.

Christ, talk about "no good deed goes unpunished". So is paid maternity/paternity leave also age discrimination because younger people are more likely to have kids?

Go look at the "Show HN" posts for some of the biggest YC companies; this community doesn't like things, and water is wet.

You can definitely still implement policies that help a given group if on the whole you are not discriminating against other groups. The alternative is to force companies to group announcements so that they are not only equitable on the whole, but at every given point in time with respect to every other point in time.

We use Goodly at HireArt. There is no tax benefit - you are right that it has the same net effect as adding to the employee's salary for them to use to pay off their loan directly.

We see it as a nice way to encourage good financial behavior (not unlike how many companies have default retirement contributions). And the fees are small enough to not make a big difference.

I think we'd also be interested in a program that took the money out of people's paychecks for repayment - especially if the issuers would give the employees a discount in exchange for getting a reliable paycheck-backed repayment.

> I think we'd also be interested in a program that took the money out of people's paychecks for repayment - especially if the issuers would give the employees a discount in exchange for getting a reliable paycheck-backed repayment.

Servicers already offer autopay with a slight (0.25%) discount direct to borrowers; not sure they have a.lot of reason to go to payroll deduction over “pull it out of your bank account”.

Why could not companies do this direct via a salary sacrifice scheme and is this post tax or pre tax.

And do companies get relief on their SS payments for doing this.

This is a sensible politic. Temporarily help your junior employees that wasn't privileged enough to have their education paid. Everybody wins.

Age discrimination as a service?

Plenty of older folks still have student loans. Also, you could argue that family medical benefits are the same thing.

If this is age discrimination then so is health insurance, but that is completely acceptable?

From a legal perspective, yes. Age discrimination in favor of older workers has never been frowned upon. It is unlike race/sex discrimination, in which all directions are notionally equally bad.

So what about those of us that don't have student loans? Do we get shafted on benefits?

What if you could use it for tuition reimbursement?

Companies have all sorts of benefits that don’t help everyone like subsidized family medical coverage. My company offers a decent tier of completely subsidized health insurance whether it is just you or you have a family with 10 dependents. They pay more for family coverage than individual coverage. Also paternity/maternity leave.

There are plenty of benefits that don't apply to me that I'm getting shafted on. If I didn't commute, for example, I would be missing out on commuter benefits that I otherwise have no way of getting. Same thing for vision care if I had 20/20 eyesight or parental leave if I have no plans to have children. Benefits don't benefit everyone equally.

This seems crazy to me. $70+ a year for something that you can just set up once with your loan servicer?

This just seems like age discrimination to me. A subtle way to cut benefits and discourage people who are over 30 from wanting to work at your company. Am I wrong?

What benefit does this have to people without student loan debt? Can they still have gym reimbursements and free sodas?

Or you know could just hire employees who don't have college degrees as having a degree doesn't mean much now.

HN comments when a company does something awful, "This is terrible!"

HN comments when a company does something nice, "This is terrible!"

I think this is more how humans in general behave on the internet. There's a strong impulse to point out what one notices (usually some perceived flaw or weakness), and critical comments always attract more upvotes. With those two axioms and a lot of iteration, you end up with a pretty negative environment. Upvotes are probably the greater problem.

Hallelujah. "But what about me, I don't have student loans!!" "Look at this age discrimination!!" These are the same group of whiners who will bitch to no end that maternity leave is unfair because they don't have kids.

i accidentally read it as 'Google replace office perks with student loan repayment'!

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