How to get employer student loan repayment assistance

Key points

• Student loan repayment assistance in the workplace is growing in popularity, thanks in part to new legislation and demand from workers.
• The average benefit is $150 per month, which could save you time and money while repaying your education debt.
• There are ways to convince your current employer to add this perk, or to find a job with a company that already offers it.

Less than one in 10 employers, small and large, offer student loan repayment assistance to their workers, but if that seems like a small number, it’s likely to get much, much bigger. After all, millions of workers saddled with education debt have been empowered in recent years to pick and choose their employer based on pay — and meaningful perks.

“The reason we’ve seen the great uptick is the Great Resignation,” says Jeff Burke, a co-founder at Paidly, one of many companies that provide student loan repayment assistance software to employers. “There’s been a huge emphasis on talent retention… and this [benefit] is something that can be used as a tool to retain talent or attract new talent.”

Student loan help could be top of mind for job applicants when you consider the average public university grad leaves campus more than $30,000 in the red. And it could make a lot of sense for employers, too, considering that Congress gave 401(k)-like tax advantages to employer-provided student loan contributions as part of the CARES Act of 2020. A company can now put as much as $5,250 toward your debt per year ($437.50 per month) through 2025 under the provision, and it wouldn’t increase your taxable income. The dollars-and-cents contributions could put a serious dent in your debt, if not diminish it altogether.

Let’s review the details of employer student loan repayment assistance and how valuable the aid could be, plus how to access it, and whether or not your current boss seems willing to help.

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Wait, employers really offer student loan payment assistance?

In a word, yes. It’s certainly not as popular as employer-provided retirement plans — think 401(k) matching — but more and more companies are in the process of adding this benefit. In fact, 17% of companies with at least 500 employees currently offer student loan repayment assistance, and another 31% plan to do the same in 2022 or 2023, according to an Employee Benefit Research Institute survey.

The CARES Act deserves at least partial credit. It has incentivized employers to use student loan repayment assistance to attract and retain employees. Without the new tax break, an employer and an employee would both have to pay $400 in payroll taxes on $5,250 of support. Plus, employees would have to pay over $1,000 in federal income taxes.

Depending on the company offering it, employer student loan repayment assistance could include:

• Making direct payments toward your loans.
• Giving you money to supplement your loan payments (perhaps as part of a referral, signing or performance-based bonus).
• Matching the amount you submit to your lender each month, either in cash or in 401(k) contributions.
• Redirecting unused benefits (such as for “PTO”) toward your loans.

And I don’t have to work in public service to get it?

No, unlike the Public Service Loan Forgiveness initiative—and other federal forgiveness and state loan repayment assistance programs—you don’t have to work in government, for nonprofits or in high-demand career fields like healthcare in order to participate.

Private companies and corporations that span finance, healthcare, media and technology, among other sectors, offer employer student loan repayment assistance to employees across traditional departments like human resources and business development as well as marketing.

Burke says that a majority of companies offering student loan repayment assistance offer it to 100% of their employees, but not always. Private healthcare companies, for example, sometimes reserve the perk for certain roles.

There must be other fine print though, right?

Well, yes. Because private student loan repayment assistance is offered by the employer, no two programs are exactly alike. The company you work for could limit the amount of aid it offers and to whom. You might have to work for the company for a certain number of years, for example, like how many employers contribute to 401(k)s but have vesting periods that span years.

Additionally, the $5,250 tax-free aid is for all education-related benefits in the workplace, so you might not be eligible for tax relief on the whole bag if you’ve already received, say, a tuition reimbursement in the same year. Also, your spouse’s or child’s student loan debt might not be eligible for assistance — even if your employer’s program covers their debt, too, it would be considered taxable income by the IRS.

How employer student loan repayment assistance can be curtailed

• Certain employees could be deemed ineligible based on their tenure or seniority level, though Paidly’s Burke says most employers make it widely available.
• The maximum value of the benefit could be limited to a certain number of years or set dollar amounts.
• The contributions could be partial (not full) matches of your payment amounts: Burke says the industry average for company-sponsored student loan assistance is about $150 per month.

Ok, but is this perk valuable enough to get worked up about?

It’s not student loan forgiveness in the sense that it would wipe away your outstanding balance overnight, but free money for your loans, even in smaller amounts, can still help you whittle down that balance ahead of schedule.

Take this example: The average public college grad with about $30,000 in student loan debt could see their balance shrink by up to $21,000 (or $5,250 per year) between 2022 and 2025. And that only accounts for employer contributions.

Since many employer student loan repayment programs are less valuable, let’s bring our example down to earth. Consider an employee with $30,000 worth of loans, an average interest rate of 8.00% and a 10-year repayment term—who receives around $100 per month ($1,800 per year) in aid:

• Without employer student loan repayment assistance: They would face monthly payments of $364 and their total cost of repayment over a decade would be $43,678.
• With $1,200 per year over four years of assistance: They would shave 2 years and 11 months off their 10-year term, plus pocket $4,296 in accrued interest savings. Their total cost of repayment would be $39,382.

Message received. How do I convince my boss to help?

Look at this like a salary negotiation. It may seem like an uncomfortable conversation, but it doesn’t need to be. You’re a valuable employee, and you’re merely being asked to be compensated for it. And if student debt’s got you down, it’s one mighty way to be compensated.

If your manager or human resources rep is skeptical, try these strategies:

• Explain that employer contributions are now tax-advantaged, thanks to the CARES Act.
• List off other employers that already offer this perk, prioritizing those that are direct competitors or at least in the same field.
• Talk about how your student loan debt might be affecting you personally and therefore professionally.
• Empower your HR rep with a list of vendors that offer business-to-business services that would make it easier to implement a loan repayment assistance program.

Which companies can set up student loan repayment assistance programs for your employer?

Besides Paidly, here are other key industry players:

• Fidelity Investments
• Goodly
• Gradifi
• IonTuition
• Paidly
• Peanut Butter
• RISLA
• SoFi
• Summer
• Tuition.io
• Vault

What if I need to find a new job that offers repayment assistance?

If that all falls on deaf ears and if your student debt has really got you down, you might consider switching employers, ideally to one that pays you a better wage or offers direct student loan repayment assistance. Unfortunately, many major job board sites (like Indeed, Monster and ZipRecruiter) don’t yet filter for employers that already offer it. But this isn’t exactly a needle-in-the-hay-stack investigation either. Try these strategies:

• For job boards with search bars, type in “student loan repayment” to populate related results.
• As you apply for new positions elsewhere, search job descriptions for student loan assistance.
• Make it a point to ask in job interviews whether this benefit is offered or could soon be offered.
• Keep tabs on “Careers” pages of major employers that already offer student loan support.

You can also find lists of companies with student loan payment assistance via the vendors that offer this business-to-business service. Goodly, for example, maintains a public list on its website.

How else can I get help with my student loans?

As you seem to know already, student loan repayment assistance is merely one piece of the puzzle. Relying solely on your boss to help you end your debt isn’t a winning strategy. Ideally, you can receive help in the workplace and work toward a zero balance by other means, too.

You might start by optimizing your budget, considering the debt snowball method or fine-tuning an overall plan to get out of debt. Every little bit helps.