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Employer student loan repayment: What it is and how to get it

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There are a lot of different programs available to help student loan borrowers pay down their debt faster, but aside from student loan forgiveness programs, student loan repayment assistance programs may be the most effective.

These programs, offered by government agencies and private employers, can provide hundreds or even thousands of dollars in aid to borrowers every year. Understanding how they work and how to qualify can make it easier to achieve your goal of becoming debt-free.

How employer student loan repayment benefits work

Student loan repayment as an employer benefit has increased in popularity. While there have long been government programs in place, it wasn’t common among private companies until recently.

According to the Society for Human Resource Management, just 8 percent of companies offered a student loan repayment benefit in 2019. In 2021, that figure grew to 17 percent, with 31 percent of companies planning to provide it in the future, according to a report by the Employee Benefit Research Institute. This is likely thanks to new laws incentivizing student loan repayment assistance.

There are a few different ways companies may structure their programs, but the primary goal is to provide lump-sum payments or recurring payments, either directly to your student loan providers or to you as the employee.

Types of employer student loan repayment assistance

There are several different types of assistance you may receive, depending on your employer of choice:

  • Signing bonus: Some employers offer a lump-sum payment as a signing bonus when you first start at the company.
  • Recurring payments: With platforms like Gradifi, employers can make direct payments to your lender on your behalf. These payments can occur monthly, annually or in some other interval. Some companies may even offer a lump-sum payment after you’ve been employed for a set period of time. In some cases, employers may include the assistance in your paycheck, which you can use to pay down your loans.
  • Service-based assistance: If you’re a member of the military or your career qualifies you for a loan repayment assistance program offered by a government agency, you’ll typically receive annual payments or a lump-sum payment after you’ve provided the required service and met other program requirements.
  • Tied to retirement savings: Employer retirement contributions are often tied to how much the employee sets aside for retirement. But in some cases, an employer may offer to contribute to your retirement if you put a certain percentage of your paycheck toward student loans instead.
  • Trade unused vacation time: At least one company allows employees to apply some of their unused paid time off toward their student loans instead of carrying it over to the following year.

How employer student loan repayment gets taxed

In the past, student loan repayment assistance payments were considered taxable income to the employees and were subject to payroll taxes. But when the CARES Act passed in March 2020, it allowed employers to provide up to $5,250 in annual student loan repayment assistance without tax consequences for the employer or the employee. The Consolidated Appropriations Act extended the tax break through 2025.

Note, however, that the $5,250 limit is a combined limit that also includes tuition assistance programs.

If you’re receiving assistance through a government program, you may not need to pay taxes on any of the assistance you receive. This is true of the National Health Service Corps Loan Repayment Program, which offers up to $50,000 in payments over two years. Check the program you’re applying for to find out whether taxes will come into play.

How to access employer student loan repayment benefits

If you’re working for a private employer that offers student loan repayment assistance, you may need to be with the company for a set period before you’re eligible, but some companies offer the benefit from the start.

If your current employer doesn’t offer the benefit, you may consider offering the idea to your human resources manager or looking for a company that does offer it.

Alternatively, you may be able to access student loan repayment assistance programs through a federal or state government agency based on your career choice. For example, health professionals, public defenders, military members and STEM workers may be eligible for loan repayment assistance programs (LRAPs). Do some research online to find out if a government program exists for your occupation and whether you qualify.

Which companies offer student loan payments?

More and more private companies are starting to offer student loan repayment assistance programs, so it’s difficult to provide a comprehensive list. But here are some major companies that offer the benefit:

  • Abbott.
  • Aetna.
  • AlloSource.
  • Andersen Global.
  • Campus Philly.
  • Carhartt.
  • Carvana.
  • Chegg.
  • ChowNow.
  • Connelly Partners.
  • First Republic Bank.
  • Freddie Mac.
  • Gale.
  • The Goddard School.
  • Google.
  • Hulu.
  • Kronos.
  • Live Nation.
  • Millennium Trust Company.
  • Natixis Global Asset Management.
  • New York Life.
  • Penguin Random House.
  • Peloton.
  • PricewaterhouseCoopers.
  • Public Prep.
  • Pure Insurance.
  • RubiconMD.
  • Sotheby’s.
  • Staples.

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Written by
Ben Luthi
Contributing writer
Ben Luthi is a personal finance and travel writer who loves helping people learn how to live life more fully. His work has appeared in several publications, including U.S. News & World Report, USA Today, Yahoo! Finance and more.
Edited by
Student loans editor