Unlock Employee Potential with Student Loan Repayment Benefits

Student loan debt is a reality that millions of employees face today — over 43.2 million Americans grapple with student loan debt, which impacts their financial stability, wellbeing, andjob satisfaction. This financial burden can make it difficult for employees to focus and engage at work too, which is why many organizations offer student loan repayment assistance.
Curious about how this employee benefit could work for you? Explore the ins and outs of student loan repayment assistance to see if it should be your next strategic move.
What Is Student Loan Repayment Assistance?
Student Loan Repayment Assistance, often referred to as SLRA, is a financial benefit or program designed to help employees manage and pay off their student loan debt. The organization provides financial support or resources to help employees make regular payments toward their student loans, reducing the financial stress that comes with high levels of student debt.
This assistance can come in various forms — you can offer direct payments to loan servicers or matching contributions. This can also look like offering educational resources to help individuals navigate the overwhelming world of student debt.
Student Loan Repayment Assistance vs. Tuition Reimbursement
Student loan repayment assistance and tuition reimbursement programs serve different, complementary purposes within an organization’s benefits package:
- Student loan repayment assistance focuses on helping employees pay down their existing student loan debt. This benefit often involves direct payments from the employer towards an employee's loan balance, reducing the financial burden of education debt.
- Tuition reimbursement is designed to cover costs for employees currently pursuing education. Employees can receive reimbursement for courses or programs, typically related to their job or career development, after meeting set requirements (such as a passing grade or course completion).
In essence, Student loan repayment helps with past educational expenses, while tuition reimbursement supports current or future educational pursuits. Both benefits can boost employee retention and attract talent by addressing different educational financing needs.
Benefits of Student Loan Repayment Assistance
As the burden of student loan debt continues to grow, employers have a unique opportunity to offer relief through student loan repayment assistance. Not all organizations do this, so offering this employee perk can help you stand out from the crowd.
Employee Benefits
By offering repayment assistance, employers can create meaningful change in their employees’ lives. Here are some of the key ways these programs make an impact and foster loyalty among the workforce:
- Boosting employee satisfaction: When employees see that their employer is committed to helping them manage their student loan debt, it directly impacts their morale and job satisfaction. This benefit shows that your company cares about their financial wellbeing, making them feel valued. As a result, employees are more likely to stay engaged and loyal, leading to reduced turnover rates.
- Alleviating financial stress: Did you know that 54% of respondents reported that their mental health struggles are directly related to that debt, according to a poll from ELVTR, an e-learning platform connecting professionals with industry leaders? This level of financial stress can seriously tank someone’s overall wellbeing and productivity, which can extend to their work and performance. A repayment assistance program can help employers relieve that mental and financial burden.
- Reducing interest costs and speeding up debt payoff: With employer contributions, employees can pay off their student loans faster, reducing the overall interest they owe. This can be incredibly empowering, allowing them to focus on other financial goals, such as buying a home or investing in retirement.
Employer Benefits
What about ways that companies benefit from a repayment plan? For starters, financial stress is a major distraction at work—66% of employees say financial concerns affect their focus on the job. Reducing that stress is just one example — here are other advantages for organizations:
- Attracting and retaining top talent: In a competitive job market, offering student loan repayment assistance can make your organization stand out. It shows prospective employees that you're willing to invest in their future, giving you an edge in attracting and retaining high-caliber talent.
- Enhancing your company brand: A program like this does more than just help with recruitment — it strengthens your brand image. When employees feel supported, they’re more likely to speak positively about your company, boosting referrals and positive word-of-mouth in the job market.
- Simplifying benefits management: A repayment program can streamline your offerings, making it easier to manage perks that really matter to employees. It provides a unique benefit that resonates with employees without overcomplicating your HR workload.
- Supporting employee wellness programs: Financial health is a key part of employee wellbeing. Repayment assistance can complement your wellness programs to foster a supportive work environment.
- Tax perks: The Consolidated Appropriations Act allows employers to offer repayment benefits through an educational assistance plan. You can deduct about $5,250 per employee, which adds up at tax time! Employees can also exclude that same $5,250 from their taxable income. It's a win-win.
Implementing Student Loan Repayment Assistance: Key Considerations for HR Managers
When implementing a student loan repayment assistance program, HR managers should keep the following considerations in mind to ensure a smooth and effective rollout:
- Understand Legal and Tax Implications
Before launching the program, consult with legal and tax professionals to fully understand the IRS guidelines under the Employer-Provided Assistance Program (Section 127). With this program, employers can deduct whatever they contribute to their employee’s loan repayment, whether they want to make it directly to the employees themselves or right to the loan servicer.
To qualify for this deduction, payments must be made under a Qualified Educational Assistance Program. Getting advice from tax professionals will help you navigate compliance requirements and maximize potential tax benefits for both the company and employees.
- Establish Clear Eligibility Criteria and Contribution Limits
Define who will be eligible to participate in the program. Consider factors such as length of service, job level, or full-time/part-time status. Set contribution limits that align with your budget, ensuring the program is both impactful for employees and sustainable for the company.
- Integrate with Existing Benefits Packages
Ensure the repayment assistance program complements your existing benefits and compensation offerings. This creates a holistic benefits strategy that doesn’t create disparities or conflicts. Communicate how this program fits with other benefits, making it clear and transparent for employees.
- Develop Effective Communication Strategies
For the program to succeed, employees need to be aware of it. Create an internal communication plan that includes email campaigns, informational sessions, and ongoing reminders to keep employees informed and engaged.
- Partner with Financial Institutions or Service Providers
Collaborating with financial service providers can simplify the program’s administration and offer expert guidance to employees. This can help ensure that the program is efficient and adds maximum value for your team.
- Monitor Impact on Employee Taxes and Reporting
Make sure employees understand how the program may impact their tax liabilities. Provide clear guidance and resources so that they can make informed financial decisions.
Deliver Holistic Wellbeing
Student loan repayment assistance is more than just a financial perk—it's a strategic benefit that can improve employee engagement, reduce financial stress, and help your organization stand out in a competitive job market.
Boosting your employees' financial health is just one piece of the wellness puzzle. A holistic strategy that includes mental, emotional, and physical wellness can unlock major benefits for your organization. For example, 91% of companies report healthcare cost savings after implementing a wellness program. Pairing student loan repayment assistance with broader wellness initiatives enables you to invest in comprehensive solutions that uplift your entire team.
Speak with a Wellbeing Specialist to discover just what our wellness program can do for your organization!

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References:
- Biden Student Loan Forgiveness FAQs: The Details, Explained. (n.d.). Forbes. Retrieved June 21, 2023, from https://www.forbes.com/advisor/student-loans/student-loan-forgiveness-faqs/#:~:text=Taxes%20on%20Student%20Loan%20Forgiveness&text=Student%20loan%20debt%20relief%20is
- Cilluffo, A. (2024, September 18). 5 facts about student loans. Pew Research Center. Retrieved September 20, 2024, from https://www.pewresearch.org/short-reads/2024/09/18/facts-about-student-loans/
- The Financial and Mental Cost of the United States’ Higher Education Issues. (n.d.). Elvtr.com. Retrieved June 21, 2023, from https://elvtr.com/blog/a-failing-system-the-financial-and-mental-cost-of-the-united-states-higher-education-issues
- Tretina, K. (2016, August 26). How To Spot 6 Student Loan Forgiveness Scam Warning Signs. Credible. Retrieved June 21, 2023, from https://www.credible.com/blog/refinance-student-loans/spot-student-loan-scams-debt-relief-services/
- Wellhub. (2023, October 18). The State of Work-Life Wellness 2024. Retrieved September 20, 2024, from https://wellhub.com/en-us/resources/research/work-life-wellness-report-2024/
- Citation: Wellhub (2024, May 16). Return on Wellbeing 2024. Retrieved September 20, 2024, from https://wellhub.com/en-us/resources/research/return-on-wellbeing-2024/
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