Student Loan Repayment Perks or Continuing Education Pay May Be Easier to Negotiate Than a Higher Salary

When it comes to handing out raises these days, companies are being downright stingy, but employers may be a lot more flexible than you'd expect when it comes to helping you repay your debt, a former Labor Department official and president of an educational organization for young Americans tells eFinancialCareers.

The group-Arlington, Va.- based Generation Opportunity-recently issued survey results showing that young Americans today are delaying major financial and life decisions because of the economy.

In fact, 27 percent say they will delay paying off student loans or other debt due to economic factors, according to an online poll Generation Opportunity commissioned last April. It surveyed 600 Americans aged 18 to 29, including college students, non-college students and young professionals.

That's why would-be employees seeking new positions would be wise to consider not only salary but loan repayment perks, says Paul T. Conway, president of Generation Opportunity and a former U.S. Department of Labor chief of staff under Labor Secretary Elaine Choa from 2005 to 2007.

According to Conway, employers who interview job candidates are not only thinking of today, but of what their needs will be 36 months and 48 months out into the future.

If a company's senior management is approaching retirement age, for instance, it will probably behoove the employer to try and retain someone who is young and talented and is either a recent college graduate grappling with student loans or a more seasoned professional working toward an MBA.

Consider taking lower salary in exchange for paying off student debt

Someone who is thinking, "I'd like to work for Bank of America or Wells Fargo" should consider taking a slightly lower salary if the bank is willing to forgive a year of debt for every year you stay with them or is able to pay the rest of a new employee's graduate degree so long as the employee stays on, says Conway, who also has served as chief of staff to the U.S. Office of Personnel Management from 2001 to 2005.

And, one needn't be coy when discussing such issues during an interview, he says. Be honest about taking MBA classes at night or working to pay down student debt, Conway says, since it will help the employer to craft a benefits package that will suit the both of you.

Interestingly enough, student loans are the No. 2 source of household debt and a common concern voiced by Occupy Wall Street protesters, CBS News reported recently.

Obama Administration offers help as well

The Obama Administration is offering a bit of relief on the student loan front, at least for those on an income-based repayment plan requiring some level of financial hardship.

Pres. Obama is accelerating a law passed by Congress last year that lowers the maximum required payment on student loans from 15 percent of discretionary income annually to 10 percent. It goes into effect next year, instead of 2014. Also, the remaining debt would be forgiven after 20 years, instead of 25. The White House said about 1.6 million borrowers could be affected.

Obama will also allow borrowers who have a loan from the Federal Family Education Loan Program and a direct loan from the government to consolidate them at an interest rate of up to a half percentage point less.

"Up to 1.6 million borrowers now in college would qualify," says an editorial in the Orlando Sentinel, calling the plan "a measured response to a serious problem: a soaring level of student debt that's a threat, not just to many of today's graduates, but to the wider U.S. economy."

Some borrowers are expected to save several hundred dollars a month in payments. However, the changes will not help bank-sponsored private loans which tend to have the higher interest rates and lack government protections.

Also, Conway warns, the accelerated timetable for putting the lower payment thresholds into effect will require "proper internal controls and Congressional oversight" to function properly within a shorter time period.