A growing trend in the last few years has been for employers to offer student loan repayment assistance to employees as a benefit. Unlike tuition reimbursement (which has been around for years), student loan repayment assistance is a relatively new concept, but one that is gaining traction.
According to the Society For Human Resource Management, about 3% of companies offered some type of assistance program to help employees pay down their student debt. But one thing is for sure, that number is growing.
Given the fact that roughly 43 million people have student loans, and that the U.S. Workforce is roughly 144 million people, that means almost 1 in 3 workers has student loans. For employers, helping their employees get out of student loan debt just makes sense.
And according to a recent survey from Student Loan Hero, 45% of employees would rather have a student loan repayment assistance program over a 401k. For younger employees (18-24), that number is even higher at 54%. Even more startling, almost 53% of employees would prefer to have student loan repayment assistance over additional vacation.
So let's dive in and see what this trend is all about.
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What Is Student Loan Repayment Assistance?
Student loan repayment assistance is an employer benefit that is exactly what it sounds like: your employer will pay off (a portion) of your student loan debt.
Every plan is structured a little differently, but there are a few key themes:
- Amounts vary from as low as $500 to $10,000 (maybe even more), and some employers even offer these amounts annually
- Payments are made directly to the lender (so it's not like a signing bonus and you won't get the cash yourself)
- Currently (as of 2016), these payments are considered taxable income for the employee
The taxability piece is important to note. Currently, Congress is considering changing student loan repayment assistance to be a tax-free benefit (similar to tuition reimbursement, healthcare spending accounts, transportation spending accounts, and more). If Congress were to move these benefits to being tax-free, you could likely see a much larger number of companies offering this benefit.
Student Loan Repayment Assistance vs. Tuition Reimbursement
Before student loan repayment assistance, there were (and still are) tuition reimbursement programs. These are programs that employers offer that provide reimbursement for employees who are going to school.
Typically, for these programs, the employee has to be an employee before starting school, has to pay for the program/class out of pocket, and the employer will reimburse all or part of the tuition paid.
These programs are beneficial for employees who need continuing education to advance, want to go back to school, employ many younger-adults who may be considering school for the first time, or employ many non-traditional students.
However, for employees who took the "traditional" path of graduating high school, going to college, and then entered the workforce, tuition reimbursement plans miss the mark. I think many companies don't realize that they may actually be frustrating employees because they can see this program exists, but are sitting with their loans and can't take advantage of it.
Hopefully more employers follow the companies below into offering student loan repayment assistance to their employees.
These Companies Offer Student Loan Repayment Assistance
We are going to continue to strive to update this list of companies. It's difficult because it's not always easy to find who is offering repayment assistance programs.
If you know of an additional program, please share it with us in the comments so we can include it in this list.
Here are the companies that offer student loan repayment assistance, and the amount they disclose to offer:
Company Name | Amount | Notes |
|---|---|---|
Aetna | $2,000/yr | Matching contribution of $2,000/yr, up to $10,000 |
Ally Financial | $10,000 | Paid as $100/mo up to $10,000 |
Chegg | $1,000/yr | No limit on years |
ChowNow | $500/yr | Operates as a matching contribution |
Common Bond | $1,200/yr | |
Connelly Partners | $1,200/yr | Paid as $100/mo, with a 5 year cap of $5,000 and bonus $1,000 in year 6 |
Fidelity | $2,000/yr | $2,000/yr for up to 5 years |
Gradifi | $3,000/yr | Paid as $250/mo up to $10,000 |
Kronos | $500/yr | |
LendEDU | $2,400/yr | Paid as $200/mo, with no cap |
Martin Health Systems | $2,000/yr | |
Natixis Global Asset Management | $10,000 | $5,000 paid at 5 year mark, followed by $1,000/yr |
Nvidia | $6,000/yr | Paid as $500/mo, up to $30,000 |
PowerTex | $1,200/yr | Paid as $100/mo for up to 6 years |
Price Waterhouse Coopers (PwC) | $1,200/yr | Paid as $100/mo for up to 6 years |
SoFi | $2,400/yr | Paid as $200/mo |
Tuition.io | $1,200/yr | Paid as $100/mo |
U.S. Government | $10,000/yr | Up to $10,000/yr for a maximum of $60,000. Each department (DOJ, State, VA, SEC, DOD) maintains specific individual requirements |
Some companies have partnered with lenders to offer special discounted interest rates on refinancing. We didn't include those as part of this because refinancing a student loan is not for everyone.
Conclusion
If your company offers any type of student loan repayment assistance program, you need to be taking advantage of it. If they don't, you should ask your HR or management to consider it.
Here's how you sell it. Many companies are finding it's a great way to retain young talent. On the flip side, employers are able to trim benefits that aren't used often (maybe a tuition reimbursement plan) and can put those resources towards a more beneficial program.
Also, consider reaching out to your U.S. Representative and encourage them to make this a tax-free benefit. That would help you (the borrower), and would likely incentivize more companies to participate as well.
Regardless of whether your employer offers these plans or not, hopefully we see more of them coming in the future.
Cynthia Lopez says
I am a RN and now work for the VA in PA. I am full time and when I asked my HR dept. they had no idea about assisting in loan forgiveness. I had asked the government agency who has my loan and they said I needed to ask the facility where I work if they participate in the program. I am getting conflicting information and I don’t know where to go from here. Also I have all these websites with information but no applications attached.
Robert Farrington says
Are you an employee or contractor? If you’re an employee and work for the VA, you’re potentially eligible for public service loan forgiveness. Check this guide out: 80 Ways To Get Student Loan Forgiveness.
sylvia says
I am also an RN and thinking these articles and “Student loan Forgiveness” is nothing but a myth. I have interviewed places that are on these sites “Loan Forgiveness” and they know nothing about it.
Robert Farrington says
Here are your options for loan forgiveness as a nurse: Nurse Loan Forgiveness Options.
And these programs are far from a “myth”. I see it every day/every month and love seeing the success stories.
The biggest reasons people fail to get something is that:
1. They don’t take the time to look for programs
2. They fail to read and follow the directions of the program (paperwork errors, etc.)
3. They did the above but didn’t want to take the correct actions (i.e. repayment plan, move to a certain area, etc.)
Celeste says
If an employer pays, can it still count toward a public service loan forgiveness program, such as if you work for the government?
Robert Farrington says
Yes, your employer’s payments count just like you making payments. So, you can still work towards PSLF if you qualify and get tuition assistance.
Seamus says
New York Life – $170/month up to 5 years = $10,200 max.