4 Ways Employers Can Offer Student Loan Payment Assistance


Thanks to a volatile job market and inflation, financial stress is already high for American workers. And soon, employees will face an added layer of financial stress: student loan payments. 

After a three-year hiatus, student loan repayments are set to resume this month. According to AARP, at the end of 2020, $1.6 trillion in total student debt existed, with the average student loan payment at $503

Employees increasingly turn to their employers to alleviate some of this stress. Here are a few ways employers can offer student loan payment assistance for their employees. 

Benefits of offering student loan assistance

The Society for Human Resource Management (SHRM) reported that only 17% of employers surveyed by the Employee Benefit Research Institute had offered employees assistance with their student loan debt. While the share of full-time job listings mentioning student loan debt repayment programs has more than doubled since 2019, it’s still relatively rare, only showing up in 3% of job posts. 

But, offering student loan assistance benefits both employees and employers in the following ways: 

  • Attracting and retaining top talent
  • Enhanced productivity 
  • Employee loyalty and engagement 
  • Demonstrate care for employees by giving them the financial aid they need

4 ways employers can help 

Tuition assistance

Tuition assistance is a long-standing benefit employers offer to help pay for continuing education. Similar to other benefits, employers can customize tuition assistance support. This benefit can include tuition reimbursement for approved degrees or programs up to a defined limit, educational stipends, professional development funds, and scholarship and grant awards. 

Under Section 127 of the Internal Revenue Code, employees are not taxed on the first $5,250 of payments made by employers each year as part of an employer’s qualifying educational assistance program. In this case, an “educational assistance program” is an employer’s written plan to pay expenses incurred by or on behalf of an employee for the employee’s education, including but not limited to tuition, fees, books, supplies, and equipment.   

Student loan assistance programs

Student loan assistance programs can help employees provide support and guidance for employees, helping them navigate their options and reduce their debt as much as possible. Employers have a few options for offering student loan assistance: 

  • Loan repayment assistance with employer-funded monthly payments. Employers can contribute $100-$200 per month (up to $5,250) to assist employees in actively paying off their loans. 
  • Student loan assistance resources. Offering digital and personal resources to help with budgeting can help employees consolidate loans, refinance to lower interest rates, learn about their Income-Driven Repayment (IDR) options and opportunities for debt relief, and complete and submit complex government loan forgiveness applications. 

Secure 2.0

Student loan debt isn’t just for younger generations; 22% of the total student loan debt is owned by Americans aged 50 or older. Older employees may have multiple student loans: their student debt plus that of their children and/or other family members. This debt prevents these workers from building their retirement savings. 

Fortunately, Secure 2.0 will offer a solution for employees to pay down their student debt while increasing their retirement savings. Under new guidelines in 2024, employers will be able to provide 401(k) contribution matches based on employees’ student loan payments. 

Flexible benefits

Employees can turn their unused PTO into tuition assistance or student loan payments with convertible benefits, such as PTO. Convertible benefits allow employees to create personalized benefits packages to meet their needs. It’s the best way for employers to address the needs of multiple generations in the workplace. Student loans affect several generations in the workplace, and convertible benefits offer a unique solution that addresses those needs. 

Help employees where it counts 

Student loans aren’t going away anytime soon. They will continue to cause employees financial stress. However, there are ways employers can offer student loan payment assistance. Learn more about using PTO Exchange to provide support through convertible benefits.

Published on Oct 03, 2023 by Rob Whalen

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