CNBC Television's video: Companies help employees pay college loans

CNBC's Sharon Epperson reports on how companies are helping their employees pay down their student loans. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi The student debt crisis has hit a new milestone — soaring to $1.7 trillion in outstanding loans at the end of last year. As more than 44 million Americans grapple with this burden, the disparity in the amount of that debt held by Black and White borrowers is also growing. Studies show that young Black adults start their careers with more student debt than Whites and that gap increases over time. The reason? White borrowers pay down their debt more quickly than their Black peers, said Fenaba Addo, associate professor of public policy at the University of North Carolina-Chapel Hill, who conducted research on the topic. For many Black young adults, “their inability to find wages and employment to pay down debt at the same rate of Whites” exacerbates the debt divide. Some employers have taken a step that could slowly reduce the debt burden among their workers — by offering student loan repayment assistance as an employee benefit. “This is such a massive problem that just the individual being responsible and paying off debt isn’t gonna make a dent in the overall crisis, especially now with the impact of coronavirus,” said Vault CEO Romy Parzick, whose company provides the technology platform for student loan repayment programs at MGM Resorts, New York Life, Prudential, Voya and other companies. It’s really important to take a “three-pronged approach,” she said. In addition to individuals paying down their loans, employers need to take responsibility because these employees are getting this education to help their employers advance their mission and objectives,” Parzick said. “And then the government has a role through relief efforts.” Prior to Covid-19, about 8% of employers offered student loan repayment assistance as a benefit, according to a 2019 survey by the Society for Human Resource Management. The share of companies that would do so could rise to one-third, the organization found, if the government allowed them to avoid taxes on the payments. The government did just that last March with the passage of the CARES Act. Although the tax-incentive was set to expire at the end of 2020, another relief package passed extends the provision for another five years through 2025. Some experts say it’s likely to become permanent. Employers can make tax-free contributions of up to $5,250 a year — or $437.50 a month — to their employee’s student debt through 2025. Employees don’t have to pay taxes on those contributions, either. Aliah Gibson, a human resource specialist, hopes to wipe out her student loans in a few years. The 31-year-old said she spends about a third of her budget paying off her student debt — and “all the extra money goes to loans,” too. But she’s not tackling her college loans alone. Her employer, New York Life, contributes $170 a month to her student loan tab and will pay off up to $10,200 of her debt over five years. » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide. The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-news-with-shepard-smith-podcast.html?__source=youtube%7Cshepsmith%7Cpodcast Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC https://www.cnbc.com/select/best-credit-cards/