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Employer Student Loan Repayment Program: Common FAQs

Student loan debt impacts over 43 million Americans, costing over $1.7 trillion. The debt has also cost borrowers many milestones; 53% of millennials haven’t bought a home yet because their debt is either hurting their ability to qualify for a mortgage or they can’t find one they can afford.[1]

If these stats blew your mind, you’re not alone. 🤯

Fortunately, there are programs out there that can help you repay your student loans. Some employers are offering perks that can put extra money toward your payments.

Employer assistance with student loans is an attractive perk, but you should make sure the benefit is worth it before you enroll in it or take a job because of it. To help you decide if the workplace perk is a benefit or a bust, we collected (and answered) the most common questions about employer student loan repayment programs.

What Is Employer Student Loan Repayment?

Employer student loan repayment assistance is an employee benefit program that gives you money to pay off your student loans.

There’s no mandated structure or set of rules that regulate the benefits. Employers can decide if and how they want to offer it.

The extra money can help you pay off your student loan faster and save you hundreds or even thousands in interest.

How Do Student Loan Repayment Benefits Work?

Great news: Your employer offers student loan repayment assistance! 🥳 But how does it work? You’ll likely receive the financial assistance as additional money in your paycheck or your employer may pay your loan servicer directly.

Some employers handle their programs internally, while others partner with companies that handle the logistics and administer the benefits.

To help you understand how the benefit works, we’ve answered some common questions.

How the Benefits Work – FAQs

Do employers commonly offer this benefit?

While help with student loan repayment is a mainstay on the workplace wishlist of many employees, it isn’t very common. In a 2020 employee benefits survey, less than 10% of participating employers offered student loan repayment benefits.[2]

When can you enroll?

Some employers may require you to work at their company for a certain amount of time before you can apply for loan repayment assistance programs. It may be weeks, months or a year before you’re eligible. Check with your employer (or future employer) to see how long you’ll wait before you can enroll.

Who is eligible?

The nondiscrimination rules in place for benefits like 401(k) and health insurance plans (rules that make all employees eligible for the same benefit) don’t usually apply to student loan repayment programs. Employers may limit eligible employees to certain tiers of employees, like non-directors or non-executives, or to only those who have completed their degrees.

Some loans may not be eligible for repayment assistance either. An employer may decide employees who took out student loans on behalf of their children, like a Direct PLUS loan, aren’t eligible for repayment benefits.

Ask your employer if you and your student loans are eligible.

How much financial assistance can employers provide?

Employers aren’t governed by any state or federal rules when it comes to how much financial assistance they can provide. How much they offer will depend on their budget and how many employees are enrolled in their program. Employers commonly offer $50 – $100 every month for a set length of time or annual lump-sum payment.

Some employers may cap how much assistance you can receive. For example, if your employer’s max on assistance is $10,000, once you hit that ceiling, you’ll no longer be eligible for the benefit.

How often can you receive benefits?

This will be up to your employer. You may receive benefits in every paycheck, once a month or in one lump sum.

What Employer Student Loan Repayment Options Are Available?

Because there are no rules that mandate how the program should be structured, your employer will decide how they want to pay out the benefits. Here are the most popular ways employers deliver student loan repayment assistance:

  • Cash payments: Employers either pay a fixed amount that is included in your paycheck or they pay a fixed amount to your loan servicer. 💵
  • Payment match programs: Employers match your monthly student loan payment(s). The money either gets added to your paycheck or sent to your loan service provider. Pro tip: If you can afford to pay more than your monthly payment(s), this is a great way to put more money toward paying off your debt because your employer matches what you pay. 👯
  • Swap programs: Some employers may let you swap out other benefits, like unused paid vacation, for a lump-sum payment to apply to your student loan debt. 🔄
  • 401(k) match programs: Instead of making contributions to your 401(k) to get an employer match, these programs state that if you pay a certain percentage of your salary toward your student loans, you can receive your employer’s 401(k) contribution. It’s a great way to pay off your student loans and save for retirement. You can still contribute to your 401(k) if you choose, but you won’t get double the employer contribution. 🤝

What Else Should You Know About Employer Student Loan Repayment?

Make sure you understand all of the features of your employer’s benefit program before you enroll. Here are answers to any lingering questions you may have.

Other Employer Student Loan Repayment FAQs

Is the money taxable?

Employer student loan repayment assistance is typically considered taxable income. However, the Consolidated Appropriations Act (2021) allows employers to provide up to $5,250 in student loan repayment assistance tax-free up to 2025.[3]

Spoiler alert: If you take part in a 401(k) match program, your employer’s contributions aren’t taxable.[4]

Is there a service commitment?

Some employers may expect you to stay at their company for a certain length of time after receiving your final benefit payment. Make sure you know what the expectations are before you opt to take advantage of this benefit.

What if you refinance your student loan(s)?

As long as you haven’t hit your employer’s assistance maximum, you should be able to refinance your student loans and continue receiving employer benefits. When you refinance you swap out your existing loan for a new loan. To be on the safe side, ask your employer if you’d still be eligible based on your new loan amount.

If you’re still eligible, remember to submit your new loan details to your employer. (FYI: Rather than offer student loan repayment assistance, some employers partner with a refinance lender and offer a discount if you refinance your student loan(s) with the lender.)

Employ the Best Financial Assistance

Student loan payments can eat up a large part of your budget, and they may make it hard to achieve other financial goals, like buying a home. 🏠

If your employer offers student loan repayment assistance, check out all the conditions of their program to make sure it’s the best decision for you. If it is, you could be well on your way to paying off your student debt faster.

The Short Version

  • Employer student loan repayment assistance is an employee benefit program that gives you money to pay off your student loans
  • You’ll likely receive the financial assistance as additional money in your paycheck or your employer may pay your loan servicer directly
  • Employers commonly offer $50 – $100 every month for a set length of time or annual lump-sum payment
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  1. Education Data Initiative. “Student Loan Debt Statistics.” Retrieved June 2022 from

  2. SHRM. “SHRM Benefits Survey Finds Renewed Focus on Employee Well-Being.” Retrieved June 2022 from

  3. SHRM. “Legislation Extends Student Loan Repayment Benefits for 5 Years.” Retrieved June 2022 from

  4. SHRM. “IRS Allows 401(k) Match for Student Loan Repayments.” Retrieved June 2022 from

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