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Company paying off student loans
16

Company paying off student loans

Company paying off student loans

(OP)
Hi everyone. I'll soon be graduating with a BSME. I've accumulated alot of debt in student loans over the years and I was wandering how common it is for companies to agree to pay off those loans for engineers. I was never comfortable bringin up the subject during interviews but now that I'm getting offers I would like to bring it up but I need to know what to expect. Any advice on this matter would be appreciated.

RE: Company paying off student loans

Why would you think that any company should/would pay for your education that you selected and completed, prior to your hire date?  What do you think your salary is for?  Do you think that you are entitled to additional income compared to someone that worked their way through school and has no debt?

RE: Company paying off student loans

2
I've never heard of an engineering company paying off anyone's student loans...

Try to remember: as a new grad, you are a liability / risk rather than a real asset to a company for at least a couple of years if not more... Once you learn the ropes a bit and the company decides you have become a valued asset, then they will probably give you a decent raise...

 

RE: Company paying off student loans

Sure, they'll pay it off.  Every few weeks, they give you a check, then you send a big chunk of it off to the student loan people.  Then you can spend the rest on living expenses, hobbies, and maybe even have a little left over for savings.  They'll probably call it a salary.

In all seriousness, I've never heard of a company paying off student loans.  

If you already work for a company and want to go back for a masters or something, there's a pretty decent chance they'll be willing to pay for some of it if they believe it will benefit the company.  Make sure ask about that up front, though.  I didn't, and now if I want to take any classes, I'm on my own.  Or get a new job.

If you can find a company that will pay off student loans, let me know, it's not too late for me yet.

RE: Company paying off student loans

As far as I know, the only thing even close to what you are suggesting is when the government forgives loans for some teachers and nurses in depressed areas.  Engineers? ....not a chance.  Companies only offer to cover your tuition for education gained while in their employ.

RE: Company paying off student loans

When you write that you are uncomfortable brining it up in interviews, do you mean that you were uncomfortable, but brought it up anyway, or that you didn't bring it up?

If a recent grad asked me in an interview if we would pay off his student loans that resume would be burned.

RE: Company paying off student loans

(OP)
I've never brought it up during an interview, however, I ALWAYS ask if the company pays for continued education and almost all have said they pay up to a certain amount/year.

I'm asking you guys about student loans because this this is not completely uncommon in other industries. I had never heard of it in engineering but many other professionals advised me to ask the company offering me a job.

Although $60K/year sounds like a lot to a new grad at first, figuring in the $100K in student loans makes that number less attractive.

Employee retention is always a problem and in highly technical positions where it may take 4+ years of training to truely understand the work, I imagine this becomes even more of an issue. If a company said they would pay off my loans as long as I committed for a certain amount of years, I it could be a win-win situation for both parties.

If no one in the engineering field has ever heard of this before, like it appears so far, then I will just sign my offer and work my butt off.  

RE: Company paying off student loans

I have never heard of any company paying off engineers (or anybody else) student loans.  My college roommate went on to medical school and got a loan that was partially forgiven if he worked at a small-town hospital for 5 years or something.  I've heard of similar loans for teachers.  I also saw a movie one time where a law firm paid off a top law students loans but I tend not to believe most of what I see in the movies.  

As stated, if you want to continue your education AFTER you have a job, a lot of companies have a tuition reimbursement program where they will pay for some or all of your tuition.  But don't even ask if they will pay off student loans.     

RE: Company paying off student loans

Like dcroasmu said - they give you a salary and then you send some if it to the loan company every month.  If you don't - they will go to your employer and take it ANYWAY!!

That is not good!!

RE: Company paying off student loans

I have heard of it being considered in UK as a way of keeping civil engineering graduates in engineering rather than go into more lucrative jobs. dont know if any company actually done it. Get a job offer, do interview at another company and ask for it. Win win for you then.  

RE: Company paying off student loans

4
It's called salary!  The company pays you a salary and you use it to pay your student loans.  Salary can also be used to buy cars, pay rent, and obtain illicit drugs.

RE: Company paying off student loans

cpmpany car is a benefit in addition to salary why is that different?

RE: Company paying off student loans

(OP)
For everyone that's said, or is thinking of saying; yeah, it's called a salery, I suggest socializing more. Loan repayment happens. I asked here because this forum is specific to engineers. Thank you for trying to stress how little companies care about emplyees these days.

RE: Company paying off student loans

On a more serious note...

Perhaps some day you will be an employer.  Is it fair to you to compensate an employee simply based on his needs?  Who is to be the judge of that?  In that case, those with the least need will get hired first!

Respectfully, as a new graduate, it is doubtful you have distinguished yourself to the point of such extraordinary reward.  (I'm not saying you won't in the future.)

p.s. I've socialized enough to meet and marry a lovely, wonderful woman and have 2.7 kids.  I've also earned enough to pay off both our student loans from my salary.  We are now enjoying the fruits of sound fiscal decisions and debt-free living.

RE: Company paying off student loans

One of the first jobs I had they did mention that possibility.  It did not happen because the income would have to be taxed and it would have made a huge change in my income for one year.
 

RE: Company paying off student loans

I have never heard of a company paying for an Engineering students school costs that was incurred before they were hired. Maybe it happens in some places. Most places I've been have some sort of tuiton assistance program.

If you want some sort of "pay-off plan" maybe you could request a signing bonus. I have received those before and they can in some cases be viewed as more favaroble by the company as they are a one time payout to you.

RE: Company paying off student loans

It's all a matter of supply and demand.  If companies get really really desparate to hire engineers and can't find any to hire, they may offer all sorts of incentives to get engineers to join their company, including paying off student loans.  However, as long as there is an adequate supply of new engineering graduates to choose from, it won't happen.

RE: Company paying off student loans

Redkardz,

I am sorry if I mistook you, but your tone seems rude to people trying to help.

Have you actually been told by a company they will pay your education? What are the terms of the repayment?

I am sure if you are not in need of a job, and had a lot of time you may be able to find a place which will negotiate.
However, most HR departments know student loans can be up-to $150K.  Now, the company is already accepting losses on an entry level person assuming they will pick things up fast and pay for themselves before the change jobs. The HR of companies knows engineering as an industry where the odds of a person leaving within a couple years are VERY high.   Making a company policy to pay off a student loan upfront just does not make any sense.   

You may be able to negotiate a situation where they would pay for your monthly bill or something. But, OO yes there will be strings.  I have heard of a couple people where I work doing such things here, but in the contract there will be something to the extent of, if you quit or are fired for something really bad, you will have to pay us back for the last year. (or something which really would make your life miserable if you wanted to change jobs)  

Good luck.
 

RE: Company paying off student loans

i have to agree with redkarz it does happen in other professions and is being talked about in engineering. Goes to show I suppose how little engineers are respected and comparitively poorly paid. Surley if a company wants the better candidates in a field where there are limited available people they be willing to stump up. Unfortunatly they don't.  

RE: Company paying off student loans

Well, it could be our fault as engineers for not demanding more, but no other engineers seem to be doing it, and I really like having a job which pays my bills.

  

RE: Company paying off student loans

My room mate in college got his last semester paid for by the company he went to work for. However he had worked there for 3 summers prior to graduation, and he was one of the few that did not get any type of sign on bonus when he started.
I could see something like this happening. But to expect an employer to pay off your student loans is out of line IMHO. Because, what about the people that worked all thru out college. They would have much less student loans than someone that did not work at all during school.  

RE: Company paying off student loans

Only the government would subsidize behavior (or create tax incentives to subsidize behavior) such that those who work the hardest get the least support/reward.  Paying an employee more because they chose to run up enormous student loans compared to an employee that prudently worked their way through school does not make sense.  Salaries can be an incentive; however, I really question the merits rewarding those who incur the greatest debt with a favored starting salary.

In contrast, I can understand why an organization would pay more for a new employee, if that employee was better educated/trained, than someone with a weaker education.  However, the size of incurred debt is not a direct correlation of the quality of one’s educational experience.  I guess that I need to get out a lot more and hang out with government elitists to understand the concept of rewarding personal debt.  

herewegothen, please tell us more about the other professions where this is common.  Especially if there are no tax incentives or government agency involved in the practice.  Nothing surprises me when it comes to how politicians buy new votes to the detriment of our society.  It would surprise me if a business engages in this practice without some finical benefit from the government.
 

RE: Company paying off student loans

Oops that should be “financial benefit” and not “finical benefit” in my last post.  

RE: Company paying off student loans

(OP)
Congratulations, I hope to do the same someday; although I hope all my kids are whole.

To date, I've been lucky enough to develop the right personal and profesional skills and graduate during a time when jobs are plentiful. Although I agree that I haven't "distinguished [myself] to the point of extraordinary reward", this does put me in a position to choose where I work based on a number of factors. I certainly don't expect to make a deal that no one has ever been offered before, but if it is not uncommon for that company, I would want to discuss the possibility with them.

As an employer, I would be willing to make exceptions for those employees who were worth it.

For reference, one HR department said they pay for any classes that you can prove benifit a healthy work/life balence. IE. art class, physical fitness class, and of course anything relatinng to your job description. This company obviously understands that happier employees are better employees. This also reduces turnover as well as costs associated with recruitment and training.

If agreeing to pay of an employees student loans, even if this results in a lower salery, helps him achieve piece of mind and in return become a better and more committed worker, then I feel it could be worth it for the company.
 

RE: Company paying off student loans

I have also never heard of any company paying off loans, only paying 'during' school.

Chris
SolidWorks/PDMWorks 08 3.1
AutoCAD 06/08
ctopher's home (updated 10-07-07)

RE: Company paying off student loans

signing bonuses happen... they don't tend to be very big for new grads, though.  I don't see the difference.  It would be interesting if there were a tax benefit to the company of paying the loan vs handing out cash.   

RE: Company paying off student loans

here's how to do it - the company (in leiu of a signing bonus which they would otherwise have been prepared to pay) agrees to pay off the new-hire's student loans in the form of monthly grossed-up stipends to cover the loan payments.  This way the "signing bonus" is spread over ~10 years and provides some incentive to stay on.  Could even scale the "bonus" based on time value of money and recruiting expenses.  If I were in HR, I'd give it some serious thought.


 

RE: Company paying off student loans

OK, here's an angle.  How would this be handled from a taxation point of view?

Will it work out better for the employer/employee?

Will it just be treated and taxed as income?

Will it be such an unusual situation that it's not worth trying to work out how to tax it?

I haven't heard of it in practice in Engineering, though you hear of this kind of things in other professions.
 

KENAT, probably the least qualified checker you'll ever meet...

RE: Company paying off student loans

I'm starting to see the advantages of not paying an employee's loans.  Helps filter out applicants with an oversize sense of entitlement and/or undersize sense of fiscal responsibility.

Believe me, you want direct control over where and when your money is sent and debts are paid.  The student loan folks are exceptionally unforgiving of the dings they put in your credit rating, even if it's the result of their mistake.

My father would make exceptions to attract and retain key people in his business.  One thing he never did was assume someone else's debt.

BTW Child (or "Adult-in-training") #1, age 8, understands compounding.  Child #2, age 5, understands consequences.  Child 2.7 will soon learn life beyond the umbilical is colder and tougher than what he/she currently enjoys.

RE: Company paying off student loans

I'm pretty sure that it would be treated as salary - with the same tax obligations to both employee and employer.

Many companies will contribute to or sponsor scholarships.  Generally these are structured as charitable contributions, and thus offer a tax advantage to the company.

Yes, many companies will pay for continuing education for existing employees.  Any if you actually look at the policies, you will see that there are conditions imposed.  Things like:  "approval required", or "after 1 year of employment", and "if you don't get a B or higher we won't pay", and "if you quit within two years of finishing, you have to pay us back".

I simply see no incentive for an engineering firm to consider paying off a new hire's student loans.  How would they recover the cost?  

The attitude that you are conveying here - intentionally or not - is that you feel that you are entitled to having a potential employer pay off your debts simply because you have them.  Someone with such an attitude is also likely to feel that they are entitled to come in late whenever they want, or to take 2-hour lunches because the "need a break in the middle of the day", or any number of other special treatments.  In short, it is a big warning flag to potential employers.   

RE: Company paying off student loans

(OP)
gymmeh - I admit my tone was a bit harsh and appologize but I was looking for informative posts like those that appeared later in this thread.

For the record, I've worked my way through school. Been at 8 different jobs in a wide variety of industries in the past 4 years.

I agree with some of you that it may work out better for the employer while apearing better for the employee.  

RE: Company paying off student loans

redkards,

Have you had an internship or co-op?

If you look around this forum, I am sure you will find many people asking questions on how to deal with company policies that make absolutely no sense what-so-ever!

When you start working for real you will find that almost all companies do things that don’t make sense.

You are correct in thinking that a happy worker may be more committed and a better worker, but that does not mean HR or the Boss of HR, or the boss of the boss of the boss understands this.

I requested more cross training form my HR department because it would make me a better worker/more efficient/ establish a better relationship with other engineering departments/etc… they said “yes that’s a good idea, BUT bla blab bla…”.

PS:  What is 0.7 x 12 month?  (I think this is what Tick was implaying)
 

RE: Company paying off student loans

Darn, I knew I shouldn't have paid cash for my car.

RE: Company paying off student loans

you already answer my question, one minute to slow

RE: Company paying off student loans

If you have any chance of making this happen, you need to do it at a company where the engineering manager holds the purse strings.  HR will likely not allow it if it is an exception to the rules and the bean-counters will never go for anything such as giving you more than absolutely required.   

RE: Company paying off student loans

I'd love to have someone pay off my student loans (13 years of college, and the 3rd degree of the 4 was partially financed by Visa), but I would still never expect an employer to pay off my loans when someone else without such debt wouldn't be able to get a similar financial benefit.  Why on earth should I be entitled to $$,$$$ worth of compensation when the debt-free person next to me doesn't get any, when they might be an even more valuable candidate than I am?

A signing bonus (more prevalent in some industries than others) is a way to get some kind of nice up-front chunk o' change that you could *choose* to use for your loans, or a new car, or toward any unreimbursable moving expenses, or your kid's college tuition, but doesn't automatically favor people with debt over people without debt.

Hg

Eng-Tips policies:  FAQ731-376: Eng-Tips.com Forum Policies

RE: Company paying off student loans

3
The rationale for paying off a new employee's loan is if there's too much competition for applicants, and that's the only way to get what you want.  Otherwise, you get maybe a signing bonus and some moving expenses.

TTFN

FAQ731-376: Eng-Tips.com Forum Policies

RE: Company paying off student loans

(OP)
I had to ask though because:

A)Life isn't fair, expecially when it comes to money and government.
- Those who save all their life won't get as much social security as those who spent every penny they earned correct?

B)It happens in other professions.
- The government would have paid off all my debt over 3 years if I had joined the marines.

I'm not saying I'm special and I deserve it. You gotta look out for number one so by not knowing all your options you are only hurting yourself.


You can call me cocky if you want to, others do all the time. I like to believe it's confidence, but I assure you that I am my own biggest critic.

Thanks for all the replys. I'm here to learn. I honestly appreciate all input.

RE: Company paying off student loans

Perhaps I was a tad harsh in my judgment.  Anything with a whiff of entitlement mentality strikes a nerve in me.

I suppose it's safer to ask here than out there, as well it should be.  I think it's safe to say that if you press your point with most employers, it is not going to leave a positive impression.

Looking forward to seeing more of you here at Eng-tips.

RE: Company paying off student loans

I think IRstuff hit the nail on the head.  If there's not enough suitable/qualified candidates in your specific category (taking into account industry, experience etc.) then that's when you see these kinds of offers.

KENAT, probably the least qualified checker you'll ever meet...

RE: Company paying off student loans

The kind of work that tends to come with student loan forgiveness is "service" work--military, teaching in hard-to-staff school districts, things like that.  That's the government using any tool it can to get people to do the kind of job not enough people want to do, with as little cash payout directly to the employee as possible (because the taxpayer won't support high salaries but for whatever reason is okay with "debt forgiveness").  In cases like that, covering student loans is a reasonable expectation.  Anywhere else, it's a rare situation indeed.

You really can't compare what the military offers to what the civilian sector offers.  The military also gives you housing and food, and will pay for your schooling AFTER you leave them; are you going to expect that kind of perk from your civilian employer because "other professions" do it and if they really cared about you and wanted you to be happy they'd do it too?  The military is not "other professions".

Hg

Eng-Tips policies:  FAQ731-376: Eng-Tips.com Forum Policies

RE: Company paying off student loans

I worked all through school and graduated with zero student loans.  Should I get a higher salary since I didn't ask to have loans paid off?
No Way!
I can't imagine that is going to happen.
What other professions have you heard of this in?  I can see maybe for a region of the country that is seriously hurting for a profession and have to offer some serious incentive, but I can't imagine it's the norm.  
I have a very close friend who is doing residency in surgery.  She is being offered more to work in Alabama than in Mew York simply because they need her specialization down there.  Nothing about paying off student loans, though.

RE: Company paying off student loans

The Marines are a special case.  Their purpose is to attract well-qualified applicants that otherwise wouldn't give the military a second glance, much less a first one.  Likewise, the military will reimburse you for medical school costs IF you sign up for 4 or 6 year hitch.  

And while that sounds competitive, it really still isn't, since the base pay is substantially lower than what you'd get for a comparable job without the tuition payoff.  From a strict return on YOUR investment perspective, it's less than breakeven, compared to a commercial sector job, unless you assume that you'll stay in 20 years, at which time, you can retire and double dip.

TTFN

FAQ731-376: Eng-Tips.com Forum Policies

RE: Company paying off student loans

Maybe for medical but generally when you take into account the free or at least subsidized accomodation, clothing, food etc that you can get in the military, depending how you play things, a lot of military folk do OK.

I know in the UK when I was trying to get into the RAF financially it was very attractive.  Sure the base pay would be on the low side but the accomodation etc. and the various bonus pays for various things added up.

KENAT, probably the least qualified checker you'll ever meet...

RE: Company paying off student loans

I have heard of companies paying off loans.  I even worked for an engineering company where they helped pay off the general managers x-wife but I won't get into that ;)

Personally I don't see anything wrong with wanting a company to pay off loans.  Its all part of the negotiating.  Maybe there are too many oldschoolers around here ;)  Everything is negotiable nowadays.  Company car, signing bonus, laptop to work from home, extra vacation days you name it.  Even working from home one day a week.  My wife's company is going to let them work from home one day a week because of gas prices.

Why would it be any different then your salary?  What if you don't have loans?  Should you get a higher salary?  Should of thought of that before you signed your acceptance letter ;)  Maybe they will have you sign a contract.  We will give you a cash bonus for x amount of years of service.  A signing bonus with stipulations.

Now, would I ask for them to pay them off?  Nope (and I have ~70k).  Only because everyone who posted here pretty much sums up the attitudes of most employers.  I would do your research.  If you are starting at 60k with little or no xp you would be pressing your luck.

Sorry for the rant but if you don't ask for it up front your probably not getting it later ;) Maybe its because I have usually worked for smaller companies (owned by large corporations) that I have seen some incredible stuff paid for on the companies tab.  

I used to have my lunch bought for me just about everyday.  10 bucks a day adds up.  Could of paid my loans at the time (before I went back for my BS that is)

Some companies are willing to pay tuition reimbursement.  Thats even worse IMHO.  I have friends who have gotten 30k+ from their company.  What if they quit?  Is it worth to go chasing after the person?  With loans the government comes after you and garnishes your paycheck.  The compnay wouldn't be any worse off helping to pay after they graduate.  Then there is incentive for them to stay ;)

Just something to think about from a disgruntled automotive engineer ;)


 

RE: Company paying off student loans

of course, everything has always been negotiable.  However, paying of student loans for a entry level person (as stated by the original post) is highly unlikely it would ever be done.  Same with a company car, signing bonus or laptop.  Rarely done for your entry level engineers.   If you feel like you want to ask for it, go for it.  However, don't be too upset when they show you the door and don't call back.  For the journeyman engineer, by all means ask for the moon and if you are good enough you will be justly compensated.

RE: Company paying off student loans

Even if they would give an option to pay off loans, I would decline.

For simplicity say: You have 40k in dept, the job offer is 50k + 10k for student loan over 4 years. After 4 years your loan is paid off & they now give you 60k. The employer may try to say that you making 60k now is a 10k raise.

Whereas, if you just take 60k, after 4 years you will not run into that issue.

I would take the best offer I recieved (not just based on salary) and take it. Pay off my loans my self.  

RE: Company paying off student loans

While I agree with the "everything is negotiable," it could be tricky. Also, I would personally prefer to negotiate for a salary than for a benefit of student loan repayment. Many companies seem to give raises as a percentage of your current salary (both performance based and inflation based). I'd take a higher salary, which will cause a larger increase at raises if I could get it over a benefit of set amount.

- MechEng2005

RE: Company paying off student loans

DWHA hit the nail on the head, companies look at total compensation when making an offer.  If they are paying off some of your debt, you will loose something elsewhere, most likely in lower salary and it will not be adjusted upwards when the debt is paid off.  You want the highest salary possible when starting out since all raises are based on that and not the extra benefits you get.

I would like to emphasize some of the comments amde here, make sure you are truly in a competitive market when asking for these extra perks because it could very easily kill your chances of getting a better offer.  Offers can easily be recinded from people asking for way too much.

RE: Company paying off student loans

Since we have established that it is unusual for employers to pay off student loans,and you feel that employees who are "worth it" should be given special consideration, you should certainly brush up on your spelling to distinguish yourself.  No offence, but these little things do stand out to employers.  It indicates personal discipline and attention to details.

RE: Company paying off student loans

(OP)
BillBirch - I will consider at least trying to get the right letters from now on since....

"Aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoetnt tihng is taht the frist and lsat ltteer be at the rghit pclae. The rset can be a toatl mses and you can sitll raed it wouthit porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe."

But if I fail, it is because I grew up with spell check, and I've yet to find that button on this site.

RE: Company paying off student loans

Spell check on Eng Tips, write your post in Word (or equivalent) then paste it in here.

That's Eng tips use 101.

(Note, I do not always follow my own avdicewinky smile)

To succeed in Engineering you'll have to learn to think around problems like this.  I don’t take kindly to people that do sloppy work and then blame it on their software application or other tools.  After all, a bad workman…

Some more advice, some of your posts come across as just a touch arrogant and others as a touch naïve.  Work on both of these areas if you want to have an easier time of it in industry.

That said, you didn’t ask for this type of advice so probably won’t appreciate it, I really should learn to keep my thoughts to myself. smile
 

KENAT, probably the least qualified checker you'll ever meet...

RE: Company paying off student loans

(OP)
KENET - I appreciate all advice. I also know my weaknesses. I struggle with writing and part of that problem is my tone. While looking for jobs, I immediately passed on anything that stressed excellent writing skills. I excel in other areas; just the way it is.

I suppose I'll copy/paste from now on, but with how fast people reply to some of these threads I've been trying to post my thoughts as quick as possible.

I've also been slightly, okay absolutely, addicted to this forum since I found it. Most of that time has been spent searching and reading. Tons of great info here.

RE: Company paying off student loans

I use Mozilla Firefox and I have dynamic spell checking as I type in the eng-tips' message box (must be part of the Mozilla software).  Note that it does little for look alike words or my grammar.

RE: Company paying off student loans

redkardz, I did poorly in English at school (it probably shows here sometimes) however written comunication is a crucial skill, at least from my experience.  While I still don't rate myself that highly in this category (I tend to be too verbose) generally my quality of written communication is now much better than most of my colleagues.

By avoiding jobs that require writing skills you may limit your choices.  Do whatever you can to improve it, not just technical writing (although this should probably be your primary focus) but less formal media such as email too.

There were posts vaguely about this topic somewhere in the last few weeks.  Also forum1010: Engineering Language/Grammar Skills has some good stuff in amongst the banter.

Maybe  

KENAT, probably the least qualified checker you'll ever meet...

RE: Company paying off student loans

redkardz,

Zapster had the best suggestion. It is actually a plugin or add on that you download from the mozilla website.

The language issue is actually a very important thing. You could be the most knowledgable engineer in the world, but no-one is going to trust what you say if it is filled with spelling mistakes. Thats just human nature.

RE: Company paying off student loans

Now that Redkardz has been pretty well beaten down, I have to mention that the Federal Agency for which I work has been known to offer to repay student loans in order to get students to sign on with us.  They've also done that with lawyers.

Something about not being able to get people to join otherwise...

Patricia Lougheed

Please see FAQ731-376: Eng-Tips.com Forum Policies: Eng-Tips.com Forum Policies for tips on how to make the best use of the Eng-Tips Forums.

RE: Company paying off student loans

(OP)
Point(s) taken.

RE: Company paying off student loans

Technical writing is largely about saying what you want clearly.

My first rule is consistency.  If you name something use that name throughout and only that name, not something that is like that name.

Try having a look at the style guide if your company has one.

Read through some English grammar guide books.  (one of the best is Bill Bryson's that is written in real English with some mess ups by the most respected organisations).  http://dictionary.reference.com/writing/ provides some links.

My personal rules (and they seem to fit in with the style guides I have seen); only have one point per sentence, use bullet points alot, define boundary points well, (eg the pressue will be 3 bananas at the entrance to the heat exchanger), try not to use it them etc particularly when it could be confused.

RE: Company paying off student loans

Consider the whole issue of tax benefits vs. investment benefits of a job... Remember that your student loan interest is most likely tax deductable (assuming your in the US).  

What's your financial strategy?  Pay off debt quickly or manage the debt?  As you consider offers from companies, the absolute most important thing to consider (besides your gut feeling about the company and the boss you will have) is #1 LOCATION and #2 BENEFITS.  Most engineers are horrible at retirement planning (and I've NEVER been able to figure out why...), but anyway... do the math on your offers for 401k matching vs. signing bonus and/or student loan pay-off options.  The driving factor will be the tax benefit.  If your student loan interest is relatively low (most are), its almost like free money... Take the tax break from the interest you pay, stretch out the loan for as long as you can with a low payment and use the extra $$$ to max out your 401k, IRA, etc...  Assuming the market doesn't completely fold...in the end... the interest you're eating on the loan will fall below the line after you consider all the tax benefits abd gains from dumping into your 401k and IRA (assumig you can contribute to a traditional IRA that is).  

And while your doing all that you are also investing in your own job stability by keeping the bank in business and also driving the economy... and if there's any profession that wants the bank to have money and the economy to grow.... its engineering...

RE: Company paying off student loans

SS makes a VERY good point about 401Ks.  While there is a pre-tax contribution limit of around $15,000, some companies will match up to 6% of your salary.  Moreover, some companies allow after-tax contributions as well.  At one point in time, I was getting about $24K per year deposited into my 401K.  If you're doing that diligently from the start, you'll have a pretty nice stash later on.

TTFN

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RE: Company paying off student loans

I have always been told dealing with finances is.

A) Pay off credit cards
B) Max out 401K company "match"
C-Z) All other financial concerns, buy land is somewhere in here.
Z) Set bank to auto-pay student loan Minimums.

The student loan is "free" money which establishes a good long term credit history.
 

RE: Company paying off student loans

(OP)
Yeah, I guess you guys are right. I just never thought debt from student loans had any advantages. I always figured the sooner I pay them off the better. If the interest on the loan is 7% but if I can invest in something that will return more that 7% I could actually make a little more money by not putting it all toward the loans. Is that the thought process behind this? I'm curious to see what kind of tax breaks these will net.

Paying the "normal" repayment plan for my loan would = $1000/month for the next 10 years. That's about 1/4 of my monthly salary after taxes. What is "normal" for most people to pay on their student loans: amount and year?

I'm already planning on having my 6% deducted for the 401K and would like to start putting money into a Roth as soon as possible.

I've been working on building good credit for a few years now. I pay for everything with credit cards but almost always pay off the balance each month. After buying 6 cars with cash, I finally bought one with a loan this summer.

I try to be responsible with money; if I keep that up then it looks like these loans won't be as much of a burden as I had thought.

Thanks for boosting my spirits about money!
 

RE: Company paying off student loans

redkardz,
It sounds like you have a good handle on where you need to be going, financially.

Your student loan interest paid will be deductible for the first 5 years.  You do not have to itemize deductions to claim the deduction, either.

7% interest sounds pretty high to me for a student loan.  Have you looked at consolidating?  Perhaps that is just the loan rates at this point.  If you have not looked at consolidating, you should for a fixed (hopefully) lower interest rate.  It may be a little harder to come by a consolidation loan due to the financial market turmoil but as a full-time employed engineer, I imagine you are a pretty "safe" risk.  

Along with that, I think I remember seeing that you have $70,000 or $100,000 in loans???  Loan amounts that high can be extended up to 30 years.  I do not advocate paying for student loans for 30 years but if your payments will take 25% of your salary, you might want to extend out to 15 or 20 years.  If you can get a 4% or 5% consolidation loan for 15 or 20 years, then set it up to have your payments automatically deducted, you can improve your situation greatly.  Sallie Mae also has a deal that if you make your payments on time for for the first 60 payments (easy with automatic payments), they lower the interest rate by 1%.  Your payments stay the same but you pay off your loans earlier due to the lower interst rate.   

RE: Company paying off student loans

4k/month after taxes just out of school?  That's not a bad starting salary!!

RE: Company paying off student loans

(OP)
Thanks; monthly take home will be roughly that much. I decided to accept their offer as given after discussing the situation in this thread. They are also giving me 5k for "relocation expenses". The last thing I wanted to do was P/O anyone there and lose this opportunity because it suits my personal interests very well. The position is w/in an engine design team and I'm a huge gear-head. If you’re wandering why I ever considered asking for more, well, one of the other offers was from a direct competitor... For now, I’ll be happy, work hard, and in a year hopefully my review will go well enough to justify a raise.

The financial advice helps. My parents didn't go to college and were in credit card debt until just recently (all the kids finally out of the home for a couple years now). Because of that I've been trying to learn as I go and take advice from wherever I can get it.

I plan on consolidating all the loans once the job thing is solidified.
7% seemed high to me. I'll soon find out if I can do better than that.
 

RE: Company paying off student loans

I consolidated in 1997 and got 7.25%.  These days you should be able to get significantly lower, probably half that.  I went the 30-year route because at the time low monthly payments were essential to my survival; I think I was giving up half my (government) (low) paycheck the first few months of paying to several different lenders.  Now I'm too lazy to look at creative ways to refinance.

My credit cards are now cheaper than my student loans.

Also, they changed the law and now you can deduct student loan interest past 5 years.  However, if you make too much money (>$70k adjusted gross income) you can't take the deduction, and if you make a little too much money (>$55k AGI) you can't take the full deduction.

http://www.irs.gov/publications/p970/ch04.html

Hg

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RE: Company paying off student loans

Double check what I am about to say because I may not have paid too much attention when I read this...But I believe I read just a few weeks ago in some kind of "advice" column that anyone looking to consolidate a student loan should wait until the rates reset in July because they are likely to be lower due to the rate cuts of the Fed.  If you consolidate with someone like SallieMae, you final fixed interest rate will be a weighted average of all your student loan rates.  If your Federal subsidized/unsubsidized loan reset to a lower rate in July, your final fixed rate would be lower.  

If I might offer one other bit of advice that goes against the popular thing right now...if your credit cards are paid off, or close to paid off, get rid of them.  Cut them up or at least do not carry them with you.  Now that you have a job and will have a significant amount of money coming in, pay cash or debit if you need to use a card.  It is far too easy to let that balance carry over and before you know it, you have thousands in credit card debt and you're asking yourself what do you have to show for it?  It gets even easier when you start a family.  Get in the habit now of not buying something unless you have the money to pay for it and it will be a great gift to your future family.  Congratulations on the new job.

RE: Company paying off student loans

I wouldn't cut up all of your credit cards; sometimes, it's handy to be able to book a hotel room, or rent a car, or book plane tickets.  You'll find it somewhat challenging to do these things without a credit card, if you do much travelling.

RE: Company paying off student loans

It's not like credit cards can multiple or generate charges on their own.

Besides, which, credit cards form part of the basis for your credit score, too many is bad, too FEW is bad as well.

Put stuff on bill pay, create monthly reminders to ensure that you pay on time.  Some credit cards have automatic debiting from your checking account.  You do need to show credit history, so have a steady history of on-time payment looks good on your credit score.

TTFN

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RE: Company paying off student loans

Think twice before cutting up or even stopping using your credit cards.  Take a look at how credit scoring works.

As far as I can tell you can get a hit for having too much on the card but... if you don't have enough on them that can also be a hit.  Cancelling cards can be a hit too.

Ridiculous I know but there are some other things about the US credit rating system that don't seem to make sense either.

I'm gratefull at this point that my student loans were in the UK so were small (about $10k) with very low interest (around 3% as I recall) and I was able to defer them my first 18 months or so after uni because at my Junior Design Engineer rate I was below the threshold to start repayment (with hindsight I probably could & should have started paying them sooner though).

KENAT, probably the least qualified checker you'll ever meet...

RE: Company paying off student loans

I apparently didn't finish my train of thought.  Human behavior is often viewed in a couple of different ways, strict disciplinarian, or disease theory.  Those who are baby-boom or older, were raised in environments that held that it was discipline and self-control that were required for life and the elimination of vices like spending, gambling, and smoking, while the current sway is that these are all "diseases," and people can't be held responsible.  

So, while cutting up your credit cards eliminates the temptation, it doesn't really help you with the thought process and discipline of delayed gratification.  The concern would be that every time you did get hold of a credit card, before cutting it up, you'd spend like maniac.  

So, if you really can't control your impulses, then cutting them up might work for you.  I tend to be old-school, and think that most people simply need to be more disciplined, both with themselves and with their children.  After all, WTF does a 8-yr old need with an iPhone, for crying out loud?  Is that really the life lesson one wants to teach their children?  My children eat candy maybe once a week; they've never actually consumed their Halloween candy.  "It's too expensive," usually stops them in their tracks.

So, I would recommend that you keep at least some of your credit cards, but only use them after serious consideration of whether the use is adequately justifiable.

TTFN

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RE: Company paying off student loans

4K/month after taxes, 401k and medical coverage deductions?

That would mean you would be getting ~70-75K annual salary, right out of college with a BSME?????

I have a MSEE with some experience and I am no where near that.

Make sure you have your calculations right before you start buying things/signing apartment leases or etc.  

RE: Company paying off student loans

(OP)
SmokinJoeR - Its not nearly that much. I just took the percentage I'm used to out for taxes and that's it. I have no experience with what charges will come out in a salary position with benefits. I only stated that to make the point of high monthly loan payments.

RE: Company paying off student loans

(OP)
I like to think of credit cards as a tool.

They can:
- prove your responsibility to lenders (Credit Score)
- help you get over financial humps (college student living paycheck to paycheck)
- allow you to rent a car, hotel room...
- be set up for auto bill-pay
- offer you rewards
- provide 0% apr for X months on stuff like appliances and tires (SEARS)
- take responsibility when dealing with a fraudulent seller
- in summary, be extremely convenient to have on you.

But just as fire is a great tool, they can be just as dangerous when mishandled.

As engineers, I expect us to be more responsible and appreciative of our tools than most people. IRstuff has it right, the key is discipline.

RE: Company paying off student loans

The thing that I'm STILL getting used to is knowing that I really only "bring home" a little more than 60% of my salary after medical, life insurance, more life insurance, taxes, more taxes, retirement, more retirement, charitable donations, etc...

Be sure to take advantage early of any 401k offered.  Just max it out and keep it that way... you will thank yourself later.. especially if you can jump in now while the market is down...

RE: Company paying off student loans

As I said, not a popular opinion at this time in our culture.  Perhaps I should have been more clear.  Yes, credit cards can be a useful tool when used responsibly and if you have a great amount of self-control.  I admit, if you travel more than once a year or fly, credit cards are pretty much a necessity, especially if you rely on company reimbursement for expenses.  

The reason I put this out to think about is that it can become easy to charge up a good chunk of money and all it takes is one unplanned event and you might have thousands of dollars sitting on a credit card with 10%-18% interest.  This can particularly happen when furnishing your first apartment/house or starting a family.  This can also easily happen if you carry your credit cards with you and see something that is a great bargain or something you really "need".  If you are forced to think about it some more before you buy, you may find that it is not such a great bargain, or you don't really need it.  

Debit cards serve the same purpose of credit cards, except it comes directly from your checking so you have to have the money to pay for something.  Makes you think a little harder before you purchase something...and you pay no interest.  

I have not had a "general" credit card for several years, and everytime I need a loan, I am greeted with "wow, you have excellent credit! I've never seen a score that high."  I do maintain a credit account with a national home improvement chain to help keep my credit history current.  In addition, I have built a relationship with my local bank and credit union for home and car loans.  I pay loans off early.  You do not need several credit cards to maintain a credit history.  

If you must keep credit cards, do not carry them with you unless you plan to purchase something ahead of time.  If you absolutely must carry a card, set the limit low enough it can easily be paid off every month, even if an emergency comes up that requires extra cash (more common than you want if you own a car or house).  

I agree with those who say the key is discipline.  I'm just trying to provide some insight, discipline isn't always enough and that's where the troubles start.  redkardz, you said yourself your parents were in credit card debt until just recently.  I imagine that created some tense moments in your household, I know it did for my parents.  I try to prevent that for my children.  If you are disciplined enough and responsible to pay off your credit cards every month,then by all means go for it.  Most people are not, however, over the long term.  Lastly, if you know anyone who is financially independent ask them if they got there by using their credit card rewards or 0% interest for 6 months, or auto bill-pay to save postage?

RE: Company paying off student loans

I don't have a debit card, and never will.  I can't see that paying 25 cents to access my own money is a good deal.  Frankly, it smacks of a conspiracy to remove money from the people don't have much to begin with.  

It's less of a problem now, but when gas prices were low, there'd be people paying 25 cents to debit 10 bucks of gas.  That was a 2.5% carrying charge; pretty damned usurious.

As for the last point, yes there are people who do that.  Again, there's nothing magical, just discipline, not spending more than you earn, and saving money everywhere and anywhere.  There's nothing incompatible with have cash on hand and still using credit cards; they're both tools to be used accordingly.  Look at the statistics: http://www.bea.gov/briefrm/saving.htm  The average person in the US is simply spending TOO DAMN MUCH!  As a nation, we're addicted to spending.

TTFN

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RE: Company paying off student loans

jpankask, I do not argue about discipline.

I wish my wife hadn't got a credit card (my name's on it too) with as higher limit as she did.  While individually we've both historically been very prudent together things seem to go awry!

My point was that credit scores are more complex than one might initially think and before taking any drastic action one should probably take stock of this if they are likely to be affected by their credit score in the near future.

KENAT, probably the least qualified checker you'll ever meet...

RE: Company paying off student loans

Ah, now I see.  I would not use a debit card if my bank charged for it either.  Banks in my area do not charge for debit cards (at least the small-town banks don't).  If they did, I probably would get a credit card with a low limit, probably half my monthly take home, to carry with me.   

RE: Company paying off student loans

Discover returns up to 1%.  Debit card returns zero.

RE: Company paying off student loans

If the place you need to spend it takes Discover that iswinky smile

Here in my part of CA different Gas stations seem to have different, shall I say scams.

ARCO (ex BP) don't take credit cards and charge for using debit cards (45C at the mo').  However typically their gas is the cheapest per gallon.  For this reason I've now using cash a lot more than I did in my last few years in the UK where I only used it at the Pub mostly.

 

KENAT, probably the least qualified checker you'll ever meet...

RE: Company paying off student loans

I gas at Costco.  It's usually at least a few cents cheaper than the ARCO across the street, not counting the 3% I get back with the Costco Amex card.  If you're an Executive member, you get an additional 1% back.

The only annoying thing is that the cheapest Costco gas is out of the way to work.

TTFN

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RE: Company paying off student loans

If you use your debit card as a credit card (the funds are still deducted immediately) there are typically no charges. The store normally pays the fee just as they do when you use a regular credit card.  At check out, just select "credit" when using your Visa debit card -no PIN needed.

RE: Company paying off student loans

GT, I'd been led to believe that using debit as credit actually delays it being taken out of your account slightly.

However, this is entirely off topic.

KENAT, probably the least qualified checker you'll ever meet...

RE: Company paying off student loans

Check out Fideltiy.  They offer a checking account that returns ~ 1.75% and make it easy to move extra funds into a money market that does almost 3.5% (currently).   The checking comes with a debit card and if you ever pay a fee to withdraw cash... they cover the fee for you...

In any case I try to live by the rule that having alot of cash is never a good investment.... at least in the U.S..

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