Chegg says it wants to pay off employees' student debt
Chegg, the online education company known for its textbook rental service, is launching a program to more aggressively help pay down its employees' student debt.
Why it matters: Instead of waiting on the possibility that Washington will tackle the growing pile of debt, a growing number of companies — and deep-pocketed private citizens — are taking on the whopping student debt burden that's plaguing millennials.
How it works: Chegg will essentially issue stock grants to employees from an equity pool that already existed (so there's no dilution), and the equity will be converted to cash and paid out annually to employees through a platform called Tuition.io.
- This would be on top of the $1,000 Chegg employees with student debt already get in cash every year.
- "All companies in America could take a pool of equity or cash that's generally used in other places for compensation, and re-route it to those who need it the most to pay down student debt," Chegg CEO Dan Rosensweig tells Axios.
- Entry-level employees through managers, who have been at Chegg for at least two years, will receive up to $5,000 annually to put toward student loans.
- More senior employees, like at the director or vice president level, can get up to $3,000 annually.
- On average, Chegg employees have $25,000 to $30,000 in student debt. The company has 1,087 employees, per its most recent financial filing, but not all are eligible given the program's two-year employment requirement.
What's next: There's no tax break for companies that have programs like this, but Rosensweig said he's been talking to lawmakers — though he wouldn't say which ones — about this idea.
Go deeper: How student debt causes lower incomes