More employers adding student loan payments as a job benefit

Unemployment Benefits
Posted at 12:46 PM, Oct 20, 2022

With the attention on student loan forgiveness right now, a small but growing number of companies are adding or considering adding student loan assistance as a benefit for their workers.

Some are offering student debt consolidation plans for people to get a better interest rate. But once that is done, the loan privatized and not eligible for future debt forgiveness or payment pauses from the federal government.

Other companies are offering monthly contributions toward the loan balance or matching what workers pay.

“They've shown that it's actually been more important for retention by having this particular program giving them money exactly to pay off their student loans and only that, as opposed to just increasing their wages,” said Craig Copeland, director of wealth benefits research at the Employee Benefit Research Institute.

He said there was a lot of interest in student loan benefits before the pandemic. COVID-19 put them on hold, but there's more focus on these benefits again.

Part of what is helping is legislative changes by Congress during the pandemic giving employers a tax break in some cases by offering student loan assistance benefits.

But it's not clear how long the tax break will last. Copeland said there are other unknowns.

“The people that are older,” he said, “they've already paid off their student loans or don't have kids. They're not happy about this, so it's created some type of issues within the workforce. So employers are having to tread that carefully.”

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