TAMPA — With $50,000 in student loan debt, Ariel Casas couldn't have been happier to open the email he got last week from his employers at Coastal Construction Group.
"I called my boss to make sure it was for real," said Casas, 28, who works in Coastal's Tampa office.
Yes, it is. Coastal is starting a new benefit to help employees pay off their student debt early.
Working through Gradifi, a Boston company that created an online platform for employers to make contributions to reduce employees' student debt, the company will pay $100 a month for employees with a year or more of service. After two years, the amount bumps up to $125 a month, and after another two years, $150 a month.
"Depending on the debt you have, depending on the interest rate, we estimate we're going to save about 30 percent of (the) time from what you would have otherwise paid," Coastal executive vice president Patrick Murphy said, assuming an average monthly debt payment of $300 to $350 a month. "So if it's a 10-year period you would have paid, we think we will have it paid off in seven years now."
Coastal is based in Miami, but has more than 300 employees in five offices around Florida. The 40 who work in central Florida are based mostly in Tampa.
And the company's profile in the bay area is on the rise because of its selection as the contractor for the first phase of the $3 billion Water Street Tampa project being launched by Tampa Bay Lightning owner Jeff Vinik and Microsoft founder Bill Gates, through his company Cascade Investment.
Murphy said student debt has been a concern for him since he represented the Treasure Coast and north Palm Beach County in Congress. After his unsuccessful bid to unseat Republican U.S. Sen. Marco Rubio in 2016, he rejoined Coastal, a business run by his family.
It was there he talked to a friend who had been with Coastal for about 15 years. With a new baby in the house, money was getting tight, and he was falling behind on student loan payments. That had triggered an escalation of the interest rate on his student loan debt into "the mid-teens," Murphy said.
"This is going to get out of control really quickly," Murphy said he thought as he listened. "Coastal, the company, has got to do something about this."
Student loan debt affects more than 40 million Americans, particularly millennials, said Murphy, who chairs the Future Forum Foundation, a nonprofit organization that researches key issues affecting millennials.
"We wanted to do something meaningful to show our employees our appreciation and to help them tackle this debt faster so they can start saving for important things like their children's education, retirement, or buying a home," said Murphy, a Democrat who this spring considered and then ruled out running for governor with former GOP congressman David Jolly.
The program also could help Coastal retain employees in an increasingly tight construction labor market, Murphy said.
"It's extremely competitive," he said. "There are major labor shortages in construction from all aspects, from the boots on the ground, installing the plumbing and the concrete and the rebar, all the way up to your chief estimator and VP project manager level."
Gradifi says the payments — typically about $100 a month — can reduce loan repayment times by up to 30 percent. For example, Gradifi estimates that a $100-per-month employer contribution on a loan with a $26,500 balance and a 4 percent interest rate over 10 years would pay off the loan three years and one month early, saving the employee a total of $10,046.
Gradifi has more than 400 corporate clients, including PricewaterhouseCoopers, Honeywell, First Republic Bank and the Peloton manufacturer of exercise bikes.
Coastal figures it probably has 75 employees who qualify for the program, Murphy said. In addition to the new student loan debt repayment program, Coastal offers benefits toward continuing education for employees who want to go back to school as well as mandatory internal training programs to help employees grow in the profession.
The student loan repayment program is expected to cost Coastal, which has more than $4 billion in active commercial and residential projects underway around Florida, $100,000 to $200,000 per year. But the company estimates it will save employees millions of dollars over a six-year period.
In announcing the program Monday, Coastal cited research from Lending Tree that student loan debt is the largest debt category for millennials in 35 of the 50 cities reviewed. Further, it said, a separate Oliver Wyman survey found that 80 percent of working professionals who have student debt consider it to be a source of either significant or very significant stress, but 4 percent of employers offer student loan repayment contributions as a benefit.
Ideally, Murphy said, Coastal's participation in the program will raise awareness about "the extreme financial burden that student loan debt has caused for many working professionals and encourage other employers to get involved" — not unlike the lead Amazon recently took by raising its minimum wage to $15 an hour.
For Casas, whose job entails using digital modeling to ensure that systems planned for new buildings fit together properly, the assistance comes at a good time. His student loan payments are scheduled to bump up to $550 a month next spring.
A seven-year employee at Coastal, he went to Florida International University while working for the company. He started studying architecture, which was expensive and contributed to his debt, he said, then switched to construction management because it seemed more practical and earned a degree in December.
"Debt is not a good thing when you're trying to buy a house," said Casas, who is married and lives in Riverview, so Coastal's contribution to his student loans "will definitely help out."
Contact Richard Danielson at email@example.com or (813) 226-3403. Follow @Danielson_Times