US contractor to assist employees paying off ‘crushing’ student debt

The move came after the firm surveyed its 3,000 employees and found that 10% are dealing with student loans, which can impact their credit and ability to focus on work. In Q3 2023, the average student loan debt in the US was $37,650 according to the Education Data Initiative.

The new two-pronged scheme aims to reduce the long-term burden of debt by accelerating the repayment timeframe.

The company claimed that for an average borrower with a $35,000 loan balance, employees could reduce their repayment time from 10 years to four years if they use both of the two plans available.

Under the first plan, Clayco will pay $100 per month towards the student debt for the first year of the programme, increasing by $50 per month for each subsequent year up to a maximum of $250 a month in the fourth year of the programme. It makes the payments using a third-party vendor.

Under the second plan, if an employee is contributing to Clayco’s 401(k) plan, they can defer the contribution to their debt and the company will continue to match the employee contribution.

Clayco’s student loan repayment plan is open to current employees and the only requirement for participation is that the employee makes at least the minimum payment each month towards their debt.

Bob Clark, Clayco executive chairman and founder said, “This past year, I asked our team what was on their minds and several employees shared that they are impacted from crushing student debt, much of it from predatory lenders.

“Our leadership listened closely and acted quickly to get this programme up and running. The plan is not just about financial aid – It’s about providing peace of mind and the freedom to focus on the future without the looming worry of student debt.”

An illustration of Clayco’s new student debt repayment plan (Image: Clayco)