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Key takeaways
- Employer student loan repayment programs can offer employees assistance in paying off their student loans through such things as signing bonuses and recurring payments directly to lenders.
- Student loan repayment assistance programs can offer employees tax-free benefits up to $5,250.
- Certain government programs may come with tax-free assistance and higher caps than employer-based offerings.
If you have student loans, consider looking for employers offering assistance repaying them. Employer student loan repayment programs, which currently provide up to $5,250 in student loan repayment annually as a tax-free benefit for employees, can be found through government agencies and private employers.
If your goal is paying off student loan debt, take some time researching these employers. Consider all your options to maximize your ability to repay your debt in a way that works for your budget.
How to access employer student loan repayment benefits
If you’re working for an employer offering student loan repayment assistance, here’s what you need to do:
- Check timeline requirements: You may need to be with the company for a set period before you’re eligible. Some companies offer the benefit from the start.
- Sign up: If you qualify, make sure you talk to your human resources department. They can help you sign up for any benefits program.
If your current employer doesn’t offer student loan repayment benefits, here’s what you can do:
- Look for a new job: Find a position with a company that offers student loan repayment assistance.
- Talk to HR: Consider suggesting it to your human resources manager. Try highlighting the benefits to the company. For instance, employers who offer student loan repayment assistance can do so tax-free up to the $5,250 limit. Offering these benefits may also help recruit, engage and retain employees.
- Research government assistance programs: You may be able to access student loan repayment assistance programs through a federal or state government agency based on your career choice. For example, health professionals, public defenders, military members and STEM workers may be eligible.
5 Types of employer student loan repayment assistance
There are several different types of assistance you may receive, depending on your employer:
- Signing bonus: Some employers offer a lump-sum payment as a signing bonus when you first start.
- Recurring payments: With platforms like Gradifi, employers can make direct payments to your lender on your behalf. These payments can occur monthly, annually or in some other interval. Some companies may even offer a lump-sum payment after you’ve been employed for a set period. In some cases, employers may include the assistance in your paycheck, which you can then use to pay down your loans.
- Service-based assistance: If you’re a member of the military or your career qualifies you for a loan repayment assistance program offered by a government agency, you’ll typically receive annual payments or a lump-sum payment after you’ve provided the required service and met other program requirements.
- Tied to retirement savings: In some cases, an employer may offer to contribute to your retirement if you put a certain percentage of your paycheck toward student loans instead.
- Trade unused vacation time: At least one company allows employees to apply some unused paid time off toward their student loans instead of carrying it over to the following year.
Which companies pay off student loan debts?
More and more private companies are starting to offer student loan repayment assistance programs, so it isn’t easy to provide a comprehensive list. Employers who offer student loan repayment benefits include firms like Ally Financial, Chegg, Google, Fidelity and more.
According to a report from the International Foundation of Employee Benefit Plans (IFEBP), just 4 percent of companies offered a student loan repayment benefit in 2019. In 2024, that figure grew to 14 percent.
How employer student loan repayment gets taxed
Student loan repayment assistance payments used to be considered taxable income to employees and were subject to payroll taxes. The CARES Act of March 2020 – part of the relief provided during the COVID-19 pandemic – allowed employers to provide up to $5,250 in annual student loan repayment assistance without tax consequences for the employer or the employee. The Consolidated Appropriations Act extended the tax break through 2025.
Note that the $5,250 limit is a combined limit that also includes employer-provided tuition assistance programs. Many companies also offer tuition reimbursement, which is different from student loan reimbursement. Tuition assistance programs typically reimburse employees up to a certain dollar amount after they complete their coursework.
Certain government assistance programs offering student loan repayment benefits do not require you to pay taxes. Check with the program to find out if taxes apply or not. This is true of the National Health Service Corps Loan Repayment Program, which offers up to $75,000 in payments over two years.
Bottom line
Paying off student loans can be overwhelming, so it’s a good idea to take advantage of available assistance programs. If you’re job searching and your student loan debt is a concern, it pays to look for employers who offer this benefit. If you already work for an employer offering this program, make sure you understand how the program works to maximize the benefit.
Use Bankrate’s student loan calculator to help determine how much employer assistance could speed your repayment process and save you on interest.
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