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Chipmaker GlobalFoundries began offering student loan debt relief to eligible employees this summer.
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The benefit is aimed at helping the company attract and retain workers.
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This comes as firms across the semiconductor industry are concerned about workforce challenges.
When Morgan earned her bachelor’s degree in 2018, she graduated with over $20,000 in student loan debt that she hoped to pay off by 2032.
While she’s kept up with her payments — which amount to a few hundred dollars each month — they’ve made it harder for her and her significant other to save for a home and their future family, the 28-year-old told Business Insider. And she’s not alone: More than 40 million Americans collectively held over $1 trillion in federal student debt last year.
However, Morgan’s student loan repayment journey has become a little easier over the past year.
In May, her employer GlobalFoundries launched a new student loan repayment program that provides qualifying US-based employees up to $28,500 in student debt relief. Morgan is a training coordinator at the New York-based manufacturer of semiconductor chips, where she develops and implements technical training for the companies’ technicians and engineers.
Since the launch, a company spokesperson told BI that 237 employees have enrolled and that it’s disbursed more than $100,000 in repayment funds. The relief program is helping repay student loans for degrees ranging from associate’s to doctorates at more than 80 US colleges and universities.
Morgan now expects to fully pay off her remaining $16,000 student debt balance by 2028 — four years earlier than planned.
“Paying off my student loans at a much faster rate will allow me to save that additional income to invest in our future, our home, and the growth of our family,” said Morgan, who asked to be identified by her first name for privacy reasons. “This program is helping me to achieve financial freedom.”
GlobalFoundries is betting that student debt relief will help it attract prospective employees and retain current workers. The company spokesperson told BI that the initial results have been promising.
“We are pleased to see enrollment numbers continue to increase, coupled with positive employee feedback,” the spokesperson said. “This demonstrates the program is making a meaningful impact on the financial well-being of our employees.”
The company’s debt relief program is part of a broader effort by semiconductor companies to grow their workforces as the US pushes for more domestic production of chips that power everything from iPhones to cars to AI tools like ChatGPT.
In 2022, President Joe Biden signed the CHIPS and Science Act into law, which included $52.7 billion in tax breaks and subsidies intended to bolster the US semiconductor industry. However, some industry leaders have raised concerns that there won’t be enough skilled workers to fill the jobs that will eventually be created.
According to a report published last year by the trade and lobbying group Semiconductor Industry Association and Oxford Economics, the US semiconductor industry faces a worker shortage of 67,000 people by 2030, including technicians, computer scientists, and engineers.
“It’s not just about attracting talent; it’s about retaining talent and ensuring our team feels supported and ready to lead in such a crucial industry,” Pradheepa Raman, chief people officer at GlobalFoundries, told BI.
To be sure, it’s unclear if programs like GlobalFoundries will successfully address the company’s workforce needs in the coming years. However, other companies in the semiconductor industry, like Nvidia, have implemented student loan reimbursement programs.
Hiring challenges have forced the company to get creative
In February, $1.5 billion of the CHIPS Act funding was allocated to GlobalFoundries to expand production at the company’s Malta, New York chip factory and build a new factory. Additionally, the Biden administration promised another $1.6 billion in federal loans. This is expected to triple GlobalFoundries’ production capacity in New York over 10 years and create roughly 1,500 manufacturing jobs.
However, filling roles like these can be challenging. Raman said GlobalFoundries has faced the same hiring challenges that are impacting the broader US semiconductor industry, which sometimes leads to longer recruitment periods for certain roles.
These hiring challenges are among the reasons the company has established partnerships with universities, community colleges, and STEM programs, in addition to starting an internal apprenticeship program in 2021 — the first of its kind in the semiconductor industry.
“The demand for skilled workers in technology is outpacing supply, which is why we’ve been so proactive in our approach to workforce development,” Raman said.
The company’s student debt relief program is just another way it’s trying to attract workers.
To be sure, debt relief isn’t provided all at once. Through a partnership with the education platform EdAssist by Bright Horizons, GlobalFoundries sends a monthly payment directly to an employee’s loan provider for up to 10 years.
Both current workers and new hires are eligible to apply for the relief program, which the company expects to be an ongoing benefit offered to employees. To continue receiving the relief, an employee must make their minimum student debt payment, have a loan in good standing, and remain employed by GlobalFoundries.
“GlobalFoundries’ contribution applies uniformly to all employees and increases over time with an initial investment of more than $100 a month during the first four years and up to $28,500 over the lifetime of the program,” the company spokesperson said.
In addition to debt relief, GlobalFoundries also offers a childcare subsidy and paid parental leave — 20 weeks for the birth parent and 12 weeks for the non-birth parent.
These perks are helping employees like Stephanie, a marketing specialist based in Austin.
After Stephanie earned an MBA in 2015, she said she had about $50,000 in student loan debt — her current balance is about $39,000. She said she signed up for GlobalFoundries’ relief program on “day one” and received her first payment less than a month later, the 33-year-old told BI. She asked to be identified by her first name for privacy reasons.
The relief has been a “game changer,” Stephanie said. If she stays at her job, she estimates GlobalFoundries will contribute thousands. She said she was only eligible for five years of relief because, under her repayment plan, her loans are supposed to be paid off within that timeframe.
Before Stephanie enrolled in the program, she said she was on track to pay off her student debt by 2028. She now expects to pay it off at least one year ahead of schedule.
“It’s made a real difference in reducing my principal and has given me more flexibility for my future instead of feeling constantly tied down by student loans.”
Do you work in the semiconductor chip industry and have a story to tell? Reach out to this reporter at jzinkula@businessinsider.com.
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