By Rebecca Heilweil
A new move by the education technology company Chegg is part of the company's broader campaign calling for both corporations and the government to tackle the country's mounting student debt crisis.
Last week, Chegg announced a new benefit that will allow employees to pay off their student debt through an equity pool of the company's existing stock. Employees will be eligible for the benefit regardless of whether or not they attended a two- or four-year institution or if they ultimately graduated.
After working for two years at Chegg, employees at the entry and manager levels will be eligible for repayment of up to $5,000 a year, while directors and vice presidents will be eligible for repayment of up to $3,000 a year.
"We're taking our best and our brightest and murdering them with a lifetime of debt," Chegg CEO Dan Rosensweig told Cheddar, pointing to the high rates of depression and suicide on college campuses. "How is it that companies are the beneficiaries of education, but we don't really contribute to it? How is that the government takes our money as a taxpayer, then gives it to our children, then charges them interest?"
"We're saying to corporations, find creative ways to help eliminate or reduce significantly the student debt of your employees. That would be a $1.5 trillion stimulus to the economy," said Rosensweig. "We're saying to the government that: why don't we eliminate the interest rate, or at least significantly reduce it."
Rosensweig supports creating a tax break to companies for offering student loan repayment, similar to the tax benefits already offered to companies to help fund their employees' continuing education.
Congress is currently considering a provision that would do just that.
Student loan debt has become a national crisis. Borrowers currently owe about $1.5 trillion in student loan debt, according to New York Federal Reserve data, and more than 2 million former students have defaulted on their debt in the past six years, as reported by the Wall Street Journal.
Student debt repayment plans have become an increasingly attractive benefit to employees. Companies including Fidelity, PricewaterhouseCoopers (PwC), Staples, and Random House have all begun to offer forms of tuition reimbursement to their hires.
Meanwhile, companies like Tuition.io and Gradifi — a startup acquired by First Republic Bank in 2016 — both help companies package student loan repayment in the form of a benefit.
"I'm optimistic that more companies will do something," said Rosensweig. "It may not be exactly what we did."
"But whatever they do, it's got to be upside," he added.
For full interview click here.