Mike Schabel remembers that he had eaten peanut butter and tortillas for saving money, while he and his wife had paid off about $ 100,000 in student loans.
So when the chief executive of Kiswe, a video stream start-up, tried to compete for recruits against technology giants such as Amazon and Google two decades later, he adopted a new approach: offer to assist in scrapping student loans. (Amazon founder Jeffrey P. Bezos owns The Washington Post.)
"It is important to recruit and retain top technical talent," says Schabel, whose company has 45 people on the east coast and abroad.
Kiswe misses a budget for the powerhouses in Silicon Valley, but Schabel hopes that the advantage will make his company stand out for jobseekers in a historically tight labor market.
The country has more vacancies than available applicants, so finding the right fit for open positions is difficult, he said.
Kiswe started donating $ 50 monthly contributions this month for staff members with a loan for student loans.
"I have people fresh from school who do their best to make ends meet," Schabel said. "They have put themselves in huge debt to work for me."
Approximately 1 in 4 adults in the United States have student debt and the collective total reached $ 1.5 trillion last year, according to Federal Reserve data.
Economists say that the burden prevents or slows some people from having children, buying homes, and starting businesses.
The Society for Human Resource Management, a trade group that annually examines approximately 3,500 HR professionals about the benefits at their workplace, said that more companies offer to help recruits with student loans – but the value of that benefit varies greatly.
International consulting firm PwC introduced the benefit in 2016 and annually pays $ 1,200 directly to the lender for six years. Approximately 8,700 employees have signed up, according to the company.
"Even employees without a student loan debt tell us that they are proud of the groundbreaking advantage," said chief people officer Michael Fenlon in an e-mail. "They are proud that the company is a complex, important problem in our society, especially if they have a negative impact on their own friends, family and colleagues."
Insurance provider Aetna has rolled out the student loan payout program in 2017, with $ 2,000 a year being loaned to service companies with a maximum lifetime of $ 10,000.
More employers are considering adding the benefit because it is becoming more difficult to fill vacancies, says Alison Sullivan, an economics researcher at Glassdoor, a website about employment.
"Employers know that many employees are stuck with loans for student loans and expect to renounce them for decades," Sullivan said.
The tax weighs disproportionately heavily on women and minorities, according to a recent analysis of government data from the American Association of University Women: women with bachelor's degrees absorb about $ 2,700 more in loans than their male counterparts, and black women carry more student debt than any other demographic group.
David Aronson, founder of Peanut Butter, a start-up in Chicago that helps companies implement loan payment plans, said the benefit has been slow due to the fact that loan payments still count as taxable income – unlike tuition assistance. (Aronson named his company after his dependence on peanut butter sandwiches during his financially meager years.)
Plus, he said, many of today's business leaders graduated at a time when it was easier to pay for a training with a part-time job.
But Aronson said that the number of his customers has doubled in 2018 to 300. They are employers in technology, financial services and corporate offices.
He expects growth to continue if the country's unemployment retains the six-month trend of staying below 4 percent.
"Managers are beginning to realize that the burden of student debt is very different from when they left school," Aronson said.
Nevertheless, employees of all ages are stuck with student debt. For example, former President Barack Obama has revealed that he eventually paid off his loans in his forties.
Brooke Wood, 48, a branch supervisor at an Alabama Credit Union office in Birmingham, said her five-digit balance was like a "woolly mammoth" she tried to ignore.
"I do not like to watch that very often," she said.
She had studied theater at the University of Alabama and longed for an acting career in New York. But the fixed income escaped her. Interest charges stacked. She went back to the south for stability.
Then her employer introduced a new benefit this year.
Wood now gets an extra $ 50 every month to save her debts on student loans – a meaningful contribution, she said, on top of her salary of $ 55,000.
"I feel more appreciated because of this," said Wood. "It also takes away some of that shame."