Chegg reveals first of its kind equity plan to help its US employees pay off their student debt
PRNewswire 6-Jun-2019 8:05 AM
SANTA CLARA, Calif., June 6, 2019 /PRNewswire/ -- Chegg (NYSE:CHGG), the leading student-first connected learning platform, today announced an innovative equity program to help employees pay off their student debt, letting more employees benefit from the value they help create.
Under the Equity for Education program, Chegg has created an equity pool from their existing pool of stock which will be used to pay down U.S. employees' educational loans. Chegg sees this innovative program as a model that other corporations could adopt and tailor for their own employees.
"We realize the amount of debt that is taken on to pursue higher education is crushing our students, hurting families, and our economy, and we want to make an impact on the problem now. We are announcing our Equity for Education plan because we want to encourage other companies to create similar programs for their employees," says Dan Rosensweig, CEO & President of Chegg. "The student debt statistics are daunting, and we believe it's going to take a village to solve this problem."
"Corporations are one of the largest beneficiaries of our education system and they should be part of the solution to realign the system. We need updated curriculum for the global economy and companies need to do more to influence, support and subsidize their employees' education," added Rosensweig.
To encourage other companies to adopt their own Equity for Education benefit, Chegg is calling on leaders in Washington, D.C. to find new ways to support programs like this through tax incentives.
"These efforts should not be taxed as a benefit but should be incentivized because they will ultimately benefit the economy," said Rosensweig. "We believe that young Americans and their families deserve the opportunity to advance their lives through education."
The Equity for Education benefit applies to any Chegg US employee with student debt, irrespective of whether they attended a 2- or 4-year college, or ultimately graduated. Under the new Chegg program, entry level employees through manager level, who have at least two years tenure at Chegg will receive up to $5,000 annually. Employees at the Director or Vice-President level are eligible for up to $3,000 annually.
"These new equity grants are in addition to the $1,000 cash that employees with student debt already receive each year from Chegg," said Jenny Brandemuehl, Chief People Officer of Chegg. "We believe that learning is a lifelong pursuit, which is why we also provide an additional $5,250 non-taxed reimbursement to every Chegg employee for continuing education, so they can continue to invest in their future."
- In the United States, debt related to education totals approximately $1.5 trillion1, up from roughly $1.2 trillion in 2014, a total that is greater than credit cards or auto loans2.
- According to the Federal Reserve, more than half of young people who attended college took on debt to fund their education3.
- An Urban Institute study predicts almost 40 percent of borrowers are expected to default on student loans by 20234
- In 2018, a typical monthly payment for student loans was $200-$299; around 20 percent of those who owe money for higher education were behind on their payments5. According to a 2018 report by The Society for Human Resource Management only 4% of companies offer Company-provided student loan repayment6.
"We must all continue to find ways, like the Equity for Education program, to realign and redouble our efforts to improve opportunity and diversity," Brandemuehl added.
About Chegg
Chegg puts students first. As the leading student-first connected learning platform, Chegg strives to improve the overall return on investment in education by helping students learn more in less time and at a lower cost. Chegg is a publicly-held company based in Santa Clara, California and trades on the NYSE under the symbol CHGG. For more information, visit www.chegg.com.
1 NY Federal Reserve Quarterly Report on Household Debt and Credit (2019:Q1)
2 Federal Reserve Report on the Economic Well-Being of U.S. Households in 2018
3 NY Federal Reserve Quarterly Report on Household Debt and Credit (2019:Q1)
4 Urban Institute, Underwater on Student Debt, 2018
5 Federal Reserve Report on the Economic Well-Being of U.S. Households in 2018
6 2018 "The Evolution of Benefits" report by the Society for Human Resource Management
Media Contact: Heather Hatlo Porter, press@chegg.com
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SOURCE Chegg Inc.
