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Chipmaker GlobalFoundries started providing scholar mortgage debt reduction to eligible workers this summer season.
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The profit is aimed toward serving to the corporate entice and retain employees.
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This comes as corporations throughout the semiconductor business are involved about workforce challenges.
When Morgan earned her bachelor’s diploma in 2018, she graduated with over $20,000 in student loan debt that she hoped to repay by 2032.
Whereas she’s saved up together with her funds — which quantity to a couple hundred {dollars} every month — they’ve made it tougher for her and her important different to save for a home and their future household, the 28-year-old informed Enterprise Insider. And she or he’s not alone: Greater than 40 million Americans collectively held over $1 trillion in federal scholar debt final 12 months.
Nonetheless, Morgan’s student loan compensation journey has grow to be a little bit simpler over the previous 12 months.
In Could, her employer GlobalFoundries launched a brand new scholar mortgage compensation program that gives qualifying US-based workers as much as $28,500 in scholar debt reduction. Morgan is a coaching coordinator on the New York-based producer of semiconductor chips, the place she develops and implements technical coaching for the businesses’ technicians and engineers.
Because the launch, an organization spokesperson informed BI that 237 workers have enrolled and that it is disbursed greater than $100,000 in compensation funds. The reduction program helps repay scholar loans for levels starting from affiliate’s to doctorates at greater than 80 US schools and universities.
Morgan now expects to completely repay her remaining $16,000 scholar debt stability by 2028 — 4 years sooner than deliberate.
“Paying off my scholar loans at a a lot quicker price will enable me to save lots of that further earnings to spend money on our future, our house, and the expansion of our household,” mentioned Morgan, who requested to be recognized by her first identify for privateness causes. “This program helps me to realize monetary freedom.”
GlobalFoundries is betting that scholar debt reduction will assist it entice potential workers and retain present employees. The corporate spokesperson informed BI that the preliminary outcomes have been promising.
“We’re happy to see enrollment numbers proceed to extend, coupled with constructive worker suggestions,” the spokesperson mentioned. “This demonstrates this system is making a significant influence on the monetary well-being of our workers.”
The corporate’s debt reduction program is a part of a broader effort by semiconductor corporations to develop their workforces because the US pushes for extra home manufacturing of chips that energy every little thing from iPhones to cars to AI tools like ChatGPT.
In 2022, President Joe Biden signed the CHIPS and Science Act into legislation, which included $52.7 billion in tax breaks and subsidies supposed to bolster the US semiconductor business. Nonetheless, some business leaders have raised issues that there will not be sufficient skilled workers to fill the roles that can finally be created.
Based on a report revealed final 12 months by the commerce and lobbying group Semiconductor Trade Affiliation and Oxford Economics, the US semiconductor business faces a employee scarcity of 67,000 folks by 2030, together with technicians, laptop scientists, and engineers.
“It isn’t nearly attracting expertise; it is about retaining expertise and making certain our workforce feels supported and able to lead in such a vital business,” Pradheepa Raman, chief folks officer at GlobalFoundries, informed BI.
To make certain, it is unclear if applications like GlobalFoundries will efficiently deal with the corporate’s workforce wants within the coming years. Nonetheless, different corporations within the semiconductor business, like Nvidia, have applied scholar mortgage reimbursement applications.
Hiring challenges have pressured the corporate to get artistic
In February, $1.5 billion of the CHIPS Act funding was allotted to GlobalFoundries to broaden manufacturing on the firm’s Malta, New York chip manufacturing facility and construct a brand new manufacturing facility. Moreover, the Biden administration promised one other $1.6 billion in federal loans. That is anticipated to triple GlobalFoundries’ manufacturing capability in New York over 10 years and create roughly 1,500 manufacturing jobs.
Nonetheless, filling roles like these could be difficult. Raman mentioned GlobalFoundries has confronted the identical hiring challenges which can be impacting the broader US semiconductor business, which typically results in longer recruitment durations for sure roles.
These hiring challenges are among the many causes the corporate has established partnerships with universities, neighborhood schools, and STEM applications, along with beginning an inside apprenticeship program in 2021 — the first of its variety within the semiconductor business.
“The demand for expert employees in know-how is outpacing provide, which is why we have been so proactive in our strategy to workforce improvement,” Raman mentioned.
The corporate’s scholar debt reduction program is simply one other approach it is making an attempt to draw employees.
To make certain, debt reduction is not offered unexpectedly. By means of a partnership with the schooling platform EdAssist by Vibrant Horizons, GlobalFoundries sends a month-to-month fee on to an worker’s mortgage supplier for as much as 10 years.
Each present employees and new hires are eligible to use for the reduction program, which the corporate expects to be an ongoing profit supplied to workers. To proceed receiving the reduction, an worker should make their minimal scholar debt fee, have a mortgage in good standing, and stay employed by GlobalFoundries.
“GlobalFoundries’ contribution applies uniformly to all workers and will increase over time with an preliminary funding of greater than $100 a month in the course of the first 4 years and as much as $28,500 over the lifetime of this system,” the corporate spokesperson mentioned.
Along with debt reduction, GlobalFoundries additionally affords a childcare subsidy and paid parental go away — 20 weeks for the start father or mother and 12 weeks for the non-birth father or mother.
These perks are serving to workers like Stephanie, a advertising specialist based mostly in Austin.
After Stephanie earned an MBA in 2015, she mentioned she had about $50,000 in scholar mortgage debt — her present stability is about $39,000. She mentioned she signed up for GlobalFoundries’ reduction program on “day one” and acquired her first fee lower than a month later, the 33-year-old informed BI. She requested to be recognized by her first identify for privateness causes.
The reduction has been a “recreation changer,” Stephanie mentioned. If she stays at her job, she estimates GlobalFoundries will contribute hundreds. She mentioned she was solely eligible for 5 years of reduction as a result of, below her compensation plan, her loans are presupposed to be paid off inside that timeframe.
Earlier than Stephanie enrolled in this system, she mentioned she was on monitor to repay her scholar debt by 2028. She now expects to pay it off at the least one 12 months forward of schedule.
“It is made an actual distinction in decreasing my principal and has given me extra flexibility for my future as an alternative of feeling continually tied down by scholar loans.”
Do you’re employed within the semiconductor chip business and have a narrative to inform? Attain out to this reporter at jzinkula@businessinsider.com.
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