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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

Dion Rabouin, author of Markets
45 mins ago - Economy & Business

The European Central Bank and the market's moment of truth

ECB president Christine Lagarde; Photo: Chip Somodevilla/Getty Images

The biggest event for markets this week will be Thursday's meeting of the European Central Bank's governing council and the press conference following it from ECB president Christine Lagarde.

Why it matters: With interest rates jumping around the globe, investors are looking to central bank heads to see if they will follow the lead of Fed chair Jerome Powell, who says rising rates are nothing to worry about, or Bank of Japan governor Haruhiko Kuroda, who has drawn a line in the sand on rates.

Mike Allen, author of AM
1 hour ago - Politics & Policy

Manchin's next power play

Photo: "Axios on HBO"

Sen. Joe Manchin (D-W.Va.), America's ultimate swing voter, told me on "Axios on HBO" that he'll insist Republicans have more of a voice on President Biden's next big package than they did on the COVID stimulus.

The big picture: Manchin said he'll push for tax hikes to pay for Biden's upcoming infrastructure and climate proposal, and will use his Energy Committee chairmanship to force the GOP to confront climate reality.

Why picking a jury for the Derek Chauvin trial is so hard

Illustration: Eniola Odetunde/Axios

The tough task of selecting a jury for former MPD officer Derek Chauvin's trial for the killing of George Floyd is set to begin Monday.

The state of play: "This case may be the most highly publicized criminal trial in a long time. ... That means that it's harder to find people who really have an open mind," Richard Frase, University of Minnesota Law School professor of criminal law, told Axios.