How To Get Your Employer To Help Pay Off Your Student Loans
How To Get Your Employer To Help Pay Off Your Student Loans

How To Get Your Employer To Help Pay Off Your Student Loans

The amount of student loan debt in the United States is in the trillions. Many employees are finding it hard to make ends meet because of that hefty monthly loan payment. They’re trying to get raises or, even though they like their job, are looking elsewhere to make more money. What if your employer could help with your student loans? Not only will they be helping you, but there are also benefits for your employer.

Tax Benefit

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law in 2020. Under this law, companies can provide up to $5,250 in federal student loan repayment for EACH employee every year (currently up until 2025). The amount your employer contributes to your student loans is tax-fee. Not only does your employer save on taxes, but you do as well. Any student loan payments made are not considered income. This means that you do not have to pay income taxes on that amount.

Company Morale

Another benefit for your employer in offering assistance with student loan payments is a boost in company morale. Seems obvious, but it may not be to your employer. If your company is looking for ways to boost employee morale, this benefit may be worth mentioning. Not only will employees feel that their employer cares, help with student loan payments may help lessen stress. This in turn will possibly result more productive employees.

Trade Unused Vacation Time

How many of you find yourselves scrambling to use your vacation days at the end of the year? Or, maybe you don’t have that many days, but would rather have relief from student loan debt than take a vacation. What if you could “trade in” your vacation days for a student loan payment? While we are not advocating to not use any vacation time, we do understand that trying to make ends meet can be more stressful than not taking a vacation. Every employee is different and if this sounds like a good option for you, it may be worth mentioning to your employer.

How To Ask Your Employer

Schedule a meeting with your HR manager or your manager if there is not an HR department. Tell your manager that you, like most employees, have student loans (it’s up to you if you want to share the details, but it wouldn’t hurt). Tell them that you have been reading about student loan debt relief options and came across an option that will not only help you, but will also benefit them.

If you feel that your employer is not interested, try to find ways that they contribute in other areas and see if they can reallocate funds. For example, vacation days or 401K matching. If your employer already offers a 401K and matches contributions, ask if they can take a percentage of the current contribution and put it towards your student loans. Since there are tax benefits for both, they may not care where they contribute.

The Argument From Those Without Student Loans

You will have those employees who do not have any student loans or have already paid off their loans. They may argue that providing you with a student loan payment is not fair to all employees. If your employer is willing to help pay student loans, maybe they can help contribute to the 401K of those who do not have a student loan payment.

Employer Contribution Options

If your employer is willing to help make payments to your student loan debt, they have options on how to contribute:

One-Lump Sum

Your employer can pay a one lump of up to $5,250 per year to your student loan debt. This payment can be made directly to you or your student loan carrier.

Monthly Payment

Your employer can also choose to make a monthly payment to your student loan debt instead of a lump sum. The total in monthly payment must not exceed $5,250 per year to receive the tax benefit.


Whether it is a sign-on bonus or an annual bonus, your employer may choose to help pay your student loans as a bonus.

DisclaimerThis article is intended for informational purposes only. It provides general information and is not intended and should not be construed as professional advice. The author is not your attorney, accountant, financial planner or any other professional and no professional-client relationship is created. We do not represent that the information provided is accurate or up-to-date as laws and regulations are always changing. If you have an issue that requires professional help, you should contact the appropriate professional to help you on your specific set of facts. Please read the Terms and Conditions for additional information.

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