New York Times Deal Book: Firms Offer Cash to Help New Lawyers Pay Student Debt, by Elizabeth Olson:
Young lawyers, struggling with tens of thousands of dollars in student debt, are finding relief from a new source: their employers.
Some law firms are starting to contribute cash to help their newly hired lawyers meet monthly payments on education loans that can be as large as a mortgage payment on a house. That is a step beyond what some law firms now do in helping their junior lawyers refinance with lower-interest loan
Orrick, Herrington & Sutcliffe, a large firm founded in San Francisco that specializes in technology, energy and infrastructure law, plans to announce on Friday that it will contribute a monthly amount to its new associates to offset accumulated education debt. Other firms are also beginning to embrace the idea, seeing substantial debt as a big worry for their entry-level lawyers. ...
Orrick, which has more than 1,000 lawyers, is offering $100 a month for starting lawyers for 18 months. After that, the junior lawyers will be eligible to receive a bonus from the firm. The program, which starts Sept. 1, is being offered to associates who are on the track to becoming partners as well as to those who choose the less intensive career associate track. ...
Graduates arrive at law firms with an average of $185,000 in student debt, Mark Kantrowitz, a higher-education expert who tracks student debt, estimates. That compares to $75,000 a decade ago, he found. ...
But there are drawbacks to such programs. Law firm contributions are taxed as earnings. Several proposals are percolating in Congress to exempt taxation, up to a yearly maximum, on company tuition debt contributions — but none have passed.
Economists like Ms. Akers at Brookings question the wisdom of such plans. She points out that they benefit one class of employees — the debtors — over others, and draw from the same employee benefit pool that could be used to augment other universal benefits like health insurance.
“It’s a little bit like serving sushi in the workplace cafeteria,” Ms. Akers said. “It’s great for those who want it, but not so much for those who don’t.”
Wall Street Journal Law Bog, Orrick Pitching in to Pay Off Associate Student Loans:
Taxed or not, as law school student debt loads veer into the $200,000+ category, every little bit helps.
See also NY Times, The Next Big Thing In Employee Benefits: 401(k)s For Student Loan Repayment