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Illustration: Rebecca Zisser/Axios

When the 401(k) was born 40 years ago, it changed the way Americans left the workforce. Now, some companies are trying to change how we enter it.

Why it matters: Student debt is stopping a huge swath of Americans from entering the middle class, buying homes and starting families. To chip away at the problem, employers are starting to debut assistance programs that experts say could become as ubiquitous as 401(k)s or health care.

Right now only about 4% of companies offer student debt assistance, but, in today's tight labor market, they're finding that the perk attracts young talent.

  • Fidelity Investments was one of the first companies to help pay down employees’ student debt when it started its initiative in 2015. The company offers employees $10,000 over 5 years, paid out monthly.
  • Hewlett-Packard Enterprises is one of the 25 companies that has contracted Fidelity to help implement its program. Fidelity works as a record-keeper for HP employees who are taking company money to pay down debt.
  • Gradifi, which consults other firms on their student debt programs, has helped launch such programs at a range of companies from legacy publisher Penguin Random House to fitness startup Peloton.
  • Aetna, which launched its assistance program in January 2017, also offers employees $10,000 over 5 years. The company gives $5,000 over 5 years to its part-timers.
"Companies will have to find clever ways to fund this. It's going to be as mainstream as a 401(k) benefit."
— Ashwini Srikantiah, vice president for workplace emerging products, Fidelity

By the numbers:

  • About 45 million Americans have student loans to repay. The typical student accrues about $30,000 of debt, but a fifth of them owe more than $100,000, per the National Association of Realtors.
  • An overwhelming majority — 79% — of those who owe money accumulated debt while attending a four-year college.
"The cost of education continues to go up, but the cost of entry into the workforce is still a Bachelor's degree."
— Meera Oliva, executive at Gradifi

The backstory: In the early days of the 401(k), there were just a handful of adopters. Then, when the benefit became essential for luring potential workers away from competing firms, it snowballed.

Ted Benna, who's credited with inventing the 401(k), tells Axios that wide corporate adoption of student debt programs will be tougher because most companies who chose to offer 401(k) benefits already had some sort of retirement savings plan in place for employees. In comparison, student loan repayment is a radical move.

The catch: While it's often big, wealthy corporations that offer help paying back student loans, it's the graduates that choose less lucrative careers, such as in public service or at non-profits, that need these programs the most.

  • Congress offers Hill staffers up to $10,000 for student debt repayment, but interns and part-timers are not eligible and neither are those who have private loans, per CQ Roll Call.

Go deeper:

Go deeper

Updated 56 mins ago - World

Netanyahu is out as new Israeli government survives confidence vote

Photo: Gil Cohen-Magen/AFP via Getty Images

Israel has a new prime minister for the first time since 2009 after a power-sharing government led by Naftali Bennett survived a confidence vote on Sunday. Bennett was sworn in as prime minister.

Why it matters: Benjamin Netanyahu, Israel's longest-serving prime minister and the man around whom Israeli politics have revolved for a decade, will now become opposition leader. Bennett, a right-wing former Netanyahu protege, will lead the most ideologically diverse government in Israeli history.

Updated 1 hour ago - Politics & Policy

Afghanistan, cyber defense on the agenda for Biden in Brussels

Joe Biden arrives at Melsbroek Military Airport in Brussels on June 13. Photo: Yves Herman/POOL/AFP via Getty Images

President Biden touched down in Brussels on Sunday evening ahead of two days of talks with NATO and European Union leaders as part of his first foreign trip as president.

Driving the news: Biden was greeted on the tarmac by Belgian Prime Minister Alexander De Croo and a slate of other officials, including Douglas Jones and Mark Libby, the U.S. Permanent Representatives to NATO and the EU respectively.

Maersk CEO: Global businesses should be wary of politics

Photo: "Axios on HBO"

The CEO of the world's largest container-shipping company cautions that international firms have to be careful of taking political stances.

  • What they're saying: "We cannot run a global business if we start to have views on politics in every single country that we are in," Maersk CEO Søren Skou tells "Axios on HBO."