BOSTON (CBS) – A Boston startup comes out of the shadows with a program that allows companies to help their workers pay off student loans. One big client is already on board.
The business is called ‘Gradifi’ and it has been working with PricewaterhouseCoopers for two years in helping its workers chip away at student loan debt. It’s called the Student Loan Pay Down Program.READ MORE: NH State Police Release Video Of SUV Wanted In Hit And Run That Killed Retired Sgt. Donna Briggs
CEO Tim Demello explains, “It’s a brand new benefit that the companies are funding in addition to what they’re doing today.”
WBZ NewsRadio 1030’s Jeff Brown reports
In the case of PwC, they sock away an additional hundred dollars a month for eligible employees, and the company is covering the taxes.
The best part according to Demello, “It’s free to the employee, and the employer pays [them] for that.”
You are reading this right. PricewaterhouseCoopers is paying employees socked with debt to help them get out of it.
“So if the employee happens to have a loan they took out through Great Lakes or Navient or one of those firms, we have a process where we move money right into the loan account for them,” tells Demello.READ MORE: Coronavirus In Massachusetts: Today's Developments
The average college graduate carries about $30,000 in debt walking out the graduation door. This is a win for young workers, but what does the company get for this?
“Yeah it’s huge,” says Demello. “It’s good for recruiting and retaining right? It’s sort of both. PwC recruits 11,000 people off college campuses every year.”
And that, the company figures, is cheaper in the long run. The benefit, however, is not exempt from federal taxes just yet.
“What’s in the works right now, is there’s a bill in congress that would allow employers to pass this through as a tax free benefit,” Demello claims.
So how does Gradifi make its money?
According to Demello, “Most companies will outsource their benefits, they’ll outsource their payroll and there tends to be a model that they’ll pay. [Gradifi’s] fee is three to five dollars a month per employee to run the program.”
And for workers, it’s hands off.MORE NEWS: It Happens Here: Dunstable's Little Red Schoolhouse Is An Up-Close Lesson In History
Gradifi – a 12 person startup with three million in seed funding – hoping to change the world one college debt bill at a time.