More employers are adding student loan repayments as a job perk

With the current focus on student loan relief, a small but growing number of companies are adding or considering adding student loan relief as a benefit for their workers.

Some offer student debt consolidation plans so people get a better interest rate. But once that’s done, the loan is privatized and not eligible for future debt forgiveness or federal government payment breaks.

Other companies offer monthly contributions to the loan balance or match what workers pay.

“They’ve shown that it’s actually more important to retention that this particular program gives them money exactly to pay off their student loans and just that, as opposed to just increasing their salary,” Craig Copeland said. , Director of Wealth Benefits Research. at the Employee Benefits Research Institute.

He said there was a lot of interest in the benefits of student loans before the pandemic. COVID-19 has put them on hold, but the focus is once again on those benefits.

Part of what’s helping are legislative changes made by Congress during the pandemic, giving employers tax relief in some cases by offering student loan assistance benefits.

But it’s unclear how long the tax relief will last. Copeland said there are other unknowns.

“Older people,” he says, “have already paid off their student loans or don’t have children. They’re not happy with that, so it’s created some kind of problems within the workforce. Employers should therefore exercise caution.

He said some companies are tackling this problem by adding college savings account options instead.

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