Employer Student Loan Repayment Benefits
Many employers offer student loan repayment assistance. When employers provide this assistance, their contributions are generally taxable. These contributions can be helpful, but don't neglect other goals, like retirement contributions, to get them.
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Employers offer many different workplace benefits to try to attract top talent, from table tennis and catered lunch to health care and 401(k) matching.
Today, many employers have added student loan repayment assistance to their list of benefits for full-time employees. For example, here at LendEDU, employees can receive $200 each month to help pay down their student loan debt.
Student loan repayment assistance can help workers get out of debt faster and is an attractive workplace perk for young employees. This page offers numerous resources related to employer student loan repayment.
On this page:
- How an Employer Student Loan Repayment Program Can Help You Pay Off Your Student Loans Faster
- Companies Involved With Employer Student Loan Repayment Programs
- How to Factor in a Student Loan Repayment Benefit When Looking for a Job
- Additional Considerations About Employer Student Loan Repayment
How an Employer Student Loan Repayment Program Can Help You Pay Off Your Student Loans Faster
Employer student loan repayment assistance programs can allow you to make larger monthly payments to your student loans without reducing your take-home income.
For example, if an employer provides $200 per month in repayment assistance, you can put an extra $200 towards your loans and become debt-free years earlier.
If you add your employer student loan payments to the regular payments you’re already making, you can pay more than the minimum due, reduce your principal, and become debt-free much more quickly.
Companies Involved With Employer Student Loan Repayment Programs
An increasing number of businesses are offering employer student loan repayment programs, either to their own employees or to other businesses, so they can offer the benefit as well.
If you’re thinking of rolling out this benefit to your employees, here are a few companies that can help make that happen:
- EdAssist: EdAssist is a tuition management company that helps employers offer student loan assistance for employees and their children. You can learn more in our guide to EdAssist.
- Goodly: Goodly is a technology company that helps employers make after-tax contributions to employee student loan debt. Learn more in this guide to Goodly.
- Student Loan Genius: Student Loan Genius helps employees explore repayment scenarios and allows employers to make matching payments to student loan repayment. Learn more in our guide to Student Loan Genius services.
- FutureFuel: FutureFuel provides technology to allow employers to offer student debt repayment as an employee benefit. Learn more in our guide to FutureFuel.
- Tuition.io: Tuition.io is a web-based platform that helps borrowers manage their debt repayment and that assists employers in providing student loan assistance. Learn more in our guide to how Tuition.io works.
- Peanut Butter: After partnering with Peanut Butter, employers can provide student loan resources or monthly repayment benefits to eligible employees who get program perks such as financial coaching and loan refinancing opportunities. Find out more in our Peanut Butter student loan assistance review.
How to Factor in a Student Loan Repayment Benefit When Looking for a Job
Student loan repayment benefits can be a nice workplace perk, especially with the average student loan borrower sitting on more than $28,000 in student loan debt.
If you’ve received a job offer that includes this benefit, you should include it in your overall assessment of the compensation. And if you’re an employer looking for ways to attract recent graduates, offering to contribute to employees’ student loans could help.
However, the absence of an employer-sponsored student loan assistance program should not deter you from a job that has other great benefits, and employers shouldn’t forgo important benefits just because young people have student loan debt.
Staple benefits, such as health insurance and a strong 401(k) match may provide workers with much more value. Always consider the entire benefits package when you’re making a choice, as insurance and retirement plans can add thousands to your annual compensation package.
Additional Considerations About Employer Student Loan Repayment
If your employer offers student loan repayment assistance, there are a few key things you should think about when evaluating this workplace benefit.
Contributions are Taxable
When an employer offers student loan repayment help, this is not the same thing as tuition reimbursement that employers can provide to pay for you to advance your education. A large portion of employer tuition assistance programs are tax-free, but student loan repayment assistance is taxable.
However, although you have to pay taxes on employer contributions to your student debt, and this decreases the value of the workplace benefit, it is still free money to help you get out of debt.
Don’t Neglect Your Retirement Fund
Some employers offer student loan reimbursement assistance in lieu of a 401(k) match. This isn’t necessarily a bad thing because the tuition assistance can help you to become debt-free faster.
But you don’t want to “rob Peter to pay Paul,” as the saying goes. Make sure you stay on track with retirement contributions, even if your employer isn’t helping.
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Author: Christy Rakoczy