Can I Use My Unused PTO to Pay Off Student Loans? Yes — Here's How 

Student loan debt continues to be one of the most pressing financial concerns facing American workers today. According to the Federal Reserve, over 43 million people in the U.S. hold a combined $1.7 trillion in student loan debt, and many are looking for ways to manage payments while balancing other financial responsibilities. 

But what if the solution is already sitting in your HR system? 

For many employees, unused paid time off (PTO) is a hidden financial asset, one that can now be converted into direct payments toward student loans. Thanks to platforms like PTO Exchange, this is no longer a hypothetical. It’s a scalable, turnkey benefit that forward-thinking employers are already putting into practice. 

In this post, we’ll explore how these programs work, the technology behind them, and how companies are using PTO Exchange to reduce debt, boost financial wellness, and increase employee satisfaction. 

What Is PTO Exchange? 

PTO Exchange is a cloud-based SaaS platform that allows employees to convert unused PTO into other forms of compensation, including retirement contributions, HSA deposits, charitable giving, and yes, student loan repayment. 

Through integrations with common HR and payroll systems (like ADP, UKG, or Workday), employers configure a PTO-for-loan program that aligns with their internal policies and IRS guidelines. Employees can then log into a self-service portal to designate the number of PTO hours they want to convert. 

The system calculates the cash value (hourly wage × hours) and initiates a payment to the employee’s student loan servicer on their behalf. Because the converted PTO is treated as regular wages, it is subject to standard tax withholding, but employers can leverage tax-advantaged structures, such as Section 127 of the IRS code, which allows up to $5,250 per year in tax-free student loan repayment in many cases. 

How It Works: A Seamless, Automated Workflow 

The process is fully digital and requires minimal lift from HR teams: 

1. Integration – PTO Exchange connects securely to time-off and payroll systems via APIs. 

1. Configuration – Employers set limits, payment schedules, and eligibility rules. 

1. Employee Action – Workers log into the portal, choose how many hours to exchange, and direct the funds to their loan servicer. 

1. Automation – The platform handles calculations, tax treatment, and fund transfers behind the scenes. 

Because PTO is already a budgeted wage expense, employers don’t incur new costs, making this a budget-neutral benefit with a big impact. 

Why It Matters: Student Loan Debt Meets Flexible Benefits 

The value of this approach is clear: 

• Unused PTO is often forfeited if not used, especially in companies with “use-it-or-lose-it” policies. 

• Employees want more flexibility in how they’re compensated. 

• Student loan debt is a major stressor, especially among Millennial and Gen Z workers. 

By connecting these dots, employers can offer a meaningful financial wellness tool that helps reduce debt and improve retention, all without increasing payroll costs. 

In fact, PTO Exchange reports that as of mid-2025, it has processed over 2 million PTO hours, representing more than $100 million in value, across retirement, HSA, and student loan exchanges. Over 100,000 employees have used the system to direct funds toward their financial goals. 

Real Results: What Employers Are Seeing 

📌 Case in Point: A Hospital Employee Campaign 

In one case study, a hospital implemented PTO Exchange and allowed roughly 1,500 employees to convert 30–75 hours of unused time. The result? Over $90,000 in student loan contributions in just the first year. 

📌 Unum’s PTO-to-Student Loan Program 

At Unum, one of the early adopters of this benefit model, the average employee contribution toward student loan debt was $1,250 through converted PTO. 

📌 MassMutual & Goldman Sachs Join In 

MassMutual recently launched a similar initiative, allowing employees to convert up to five PTO days into student loan payments annually. According to Ayco, a Goldman Sachs company, 25% of large employers now offer PTO conversions for student loan repayment or retirement contributions. 

What Employers Can Expect 

In addition to driving meaningful financial support for employees, employers using PTO Exchange report: 

• Turnover reduction of up to 54% among employees who engage with the platform (source) 

• Increased 401(k) and HSA participation 

• Enhanced benefit equity, especially for lower-income workers who may not fully utilize PTO 

• A competitive edge in talent attraction and retention 

As PTO Exchange CEO Rob Whalen put it: 

“PTO is an earned wage and individuals should be able to self-direct it for what matters most.” 

Final Thoughts: A Win-Win for Employers and Employees 

The ability to convert unused PTO into student loan payments is no longer just a nice-to-have, it’s a strategic benefit that supports employee financial wellness, increases loyalty, and reduces benefit waste. 

With PTO Exchange, companies can offer this feature securely, compliantly, and at scale, giving their teams the freedom to use earned benefits in ways that matter most. 

Ready to Empower Your Workforce? 

Learn more about how PTO Exchange can help your organization turn unused time off into powerful financial outcomes. Request a demo or explore how other companies are using the platform to reduce liability, increase retention, and support their employees' futures.