This Company Is Helping Pay Its Workers' Student Loans

A U.S. tech giant says it plans to help its employees pay their student loans to help keep, attract and prepare talent for the industry.

GlobalFoundries (GF) said on Thursday it is set to kick-start the plan in 2024 for the company's American-based employees who qualify for support on their loans of up to $28,500.

The plan is for those that borrowed to pay for what GF, a New York-listed semiconductor manufacturer valued at more than $30 billion, describes as degrees and credit-based certificate programs from American institutions of higher education.

The move comes at a time when Americans began paying back their student loans after a pause during the COVID-19 pandemic, part of the government's effort to give relief to borrowers in the midst of an economic crisis. Interest on student loans kicked in in September and payments on the debt resumed last month.

"We truly believe that with all the talent shortages this industry faces, which we are not alone in, heavy investments in talent and their capability building is very, very critical. That's the why," Pradheepa Raman, the chief people officer at GF, told Newsweek. "It's something that we've been working on and we are very, very proud to make these multi-million-dollar investments to strengthen our talent workforce."

The company told Newsweek that they were putting in more than $10 million towards this effort in helping its staff pay back their student loans and part of the goal was to keep talent in what is an increasingly competitive sector.

"Absolutely [to be] able to attract and retain and engage the best talent. That's the purpose here," Raman said.

Offering this "benefit" was also about setting a standard for the semiconductor industry, the company said.

"In the semiconductor industry, poised to double again over the next decade, the blueprint for tomorrow's innovations is directly linked to the talent we cultivate today," Thomas Caulfield, president and CEO of GF, said in a statement. "By enhancing our employee benefit programs, especially through our student loan assistance, GF is not only strengthening and building its own talent pipeline but also striving to set an industry benchmark."

Nearly 44 Americans owe a total of nearly $1.8 trillion, with an average balance of up to $44,000. The Biden administration tried to cancel $20,000 worth of student debt for borrowers, but the effort met resistance and the U.S. Supreme Court struck it down in June.

In August, the White House developed the SAVE plan, its alternative to assist borrowers to get on a path toward debt forgiveness quicker. The government has thus far been able to forgive $127 billion worth of student debt, the U.S. Department of Education said.

Student debt, while limited to less than 10 percent of Americans, is a financial burden for households. The average student loan payment for households is about $200 to $300 a month, which comes to about 5 percent of the U.S. median salary, according to Wells Fargo economists.

Senate Majority Leader Chuck Schumer, a New York Democrat, said in a statement that GF's move will help the company attract workers to the local economy and also retain talent in a key sector of the global economy.

"With the Capital Region home to GlobalFoundries—a critical chip supplier to our defense and auto industries, among others—it's all-hands-on-deck to support the current GF workforce and future recruits by easing the burden of student loan payments and fostering career growth for the next generation of NY semiconductor talent," he said.

Update 11/16/23 5:48 p.m. ET: This article was updated to include quotes from Pradheepa Raman, the chief people officer at GlobalFoundries.