PwC to start giving employees $1,200 a year in student loan debt assistance

As it visits college campuses over the next year to recruit from the Class of 2016, consulting and accounting firm PricewaterhouseCoopers will push a new benefit it hopes will help set the company apart — starting next year, the firm's freshest grads will receive $1,200 a year to help pay off student loan debt.

That kind of financial assistance is a big selling point for a company that relies heavily on recent college grads to fill positions across its auditing, consulting, tax and internal services groups. PwC hires more than 11,000 students a year through campus recruiting, and 45% of its 46,000-strong U.S. workforce are entry-level employees who graduated in the last five years.

It also marks a continuing shift in corporate priorities as companies attempt to attract and retain employees with more compelling benefits such as unlimited vacation, extended maternity leave and personal finance education.

The PwC program is being offered to all of its roughly 22,000 employees at the associate and senior associate level. Due to privacy laws that prohibit it from asking employees about personal debt, PwC doesn't know how many of those employees have student loans, spokeswoman Megan DiSciullo says.

Still, the announcement Tuesday about the benefit program comes at a time when student loan debt has become more crippling than ever. Nearly 71% of college grads have student loan debt, at an average of $35,051, according to an analysis of government data by Edvisors.com, an online resource on student loans.

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PwC's commitment isn't meant to attract more Millennials to the company, says Shannon Schuyler, PwC's chief purpose officer. Instead, she hopes it reflects a broader set of corporate values.

"It’s something that we want to be at the core of who we are ... when you look at 40 million Americans having student debt, that’s a huge problem, and if we can figure out how to be even a small part of solving that, that’s what we want to do," Schuyler says.

PwC is working with a vendor to get the loan-repayment funds direct-deposited into an employee's student loan account. Funds will start to be doled out monthly when the company's next fiscal year begins in July 2016. The funds are taxed as additional income though, so $1,200 may be more like $900 after taxes for someone in the 25% tax bracket, says Mark Kantrowitz, senior vice president and publisher of Edvisors.com.

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PwC's announcement marks a significant commitment from the private sector in addressing student loan debt. The largest loan-forgiveness program is the one that exists for people who enter public-service jobs, such as working for the government, a non-profit or the Peace Corps. But the types of companies trying to help employees with loans may change as student loan debt continues to climb.

"It is a good recruiting tool, because recent college graduates are incredibly worried about their student loans," Kantrowitz says. Plus, he says, prospective employees may be attracted not only to the monetary benefit, but to "having an employer who is responsive to your needs."

PwC's program could pave the way for similar commitments from other large, private-sector companies competing for a smart and diverse group of young employees, says David Melancon, CEO of btr., a benchmarking platform that ranks company performance based on factors like public perception and how organizations treat employees. That includes "highly competitive" sectors such as consulting and finance, he says.

"Any place where they want to bring in the best and the brightest and you don’t just want the wealthy kids," he says. "Today you want diversity, ethnicity, gender diversity. To get the best and the brightest (who) are also those things, you’re looking at people who might be coming in with a little student debt."

Plus, in addition to more traditional benefits, student debt assistance may just be a more compelling offer for Millennials, who make up the country's largest portion of the workforce. "The reality is a young adult with $35,000 and $40,000 in student loans, they don’t care about a 401(k)," says Andrew Josuweit, CEO of Student Loan Hero, a website that helps users manage student loan accounts and research repayment options. "They care about paying off their student loans."