As the student loan debt crisis continues to affect millions of workers across the country, many employers are seeking ways to help employees with this financial burden. Student loan debt can be a significant source of stress for employees, especially for those just starting their careers or managing multiple financial obligations. Offering student loan repayment assistance and education reimbursement as part of your employee benefits program can be a valuable way to improve employee satisfaction, retention, and financial well-being.

Here are some of the best ways employers can help employees manage their student loan debt and further their education.

1. Student Loan Repayment Assistance

One of the most direct ways to support employees struggling with student loan debt is to offer student loan repayment assistance. In recent years, this benefit has become increasingly popular, especially among younger workers who carry significant student loan balances. According to a 2021 survey, 70% of employees said that student loan assistance would make them more likely to stay with their current employer.

• Employer Contributions: Employers can offer a direct contribution to an employee’s student loan payments, typically made on a monthly basis. This can be done in the form of a flat amount or a percentage of the loan balance.
• Tax-Advantaged Payments: The American Rescue Plan temporarily allows employers to make tax-free student loan payments of up to $5,250 per year through 2025. This benefit helps employees reduce their loan burden while taking advantage of tax savings.

2. Education Reimbursement Programs

Education reimbursement programs are another great way for employers to support employees in their personal and professional development. These programs allow employees to pursue further education, training, or certifications to advance their skills, making them more valuable in the workplace.

• Tuition Reimbursement: Employers can offer to reimburse employees for a portion or all of their tuition expenses, whether they are enrolled in undergraduate, graduate, or vocational programs. These programs help employees pursue higher education without adding to their debt load.
• Certifications and Continuing Education: Many employees may be interested in professional certifications or skills training. Employers can provide reimbursement for courses that help employees gain new competencies relevant to their roles.

3. Student Loan Refinancing Partnerships

Some employers partner with student loan refinancing companies to provide employees with discounted rates or special terms on refinancing their loans. This can help employees save money by lowering their interest rates, reducing monthly payments, or adjusting the loan term.

• Refinancing Benefits: By working with a partner who specializes in student loan refinancing, employers can offer employees personalized advice and options to restructure their debt in a more manageable way.
• Collaborating with Fintech Companies: Employers can work with fintech platforms that specialize in managing student loans to offer employees better loan repayment strategies or help them access lower interest rates.

4. Flexible Spending Accounts (FSAs) for Education Costs

Employers can also provide flexible spending accounts (FSAs) that employees can use for educational purposes. Typically, FSAs are used for medical expenses, but a section 127 plan allows employees to use up to $5,250 of tax-free benefits each year to pay for educational expenses, including tuition, books, and fees.

• Tax-Free Educational Benefits: An FSA for education can help employees lower their taxable income, saving money while simultaneously pursuing higher education.

5. Student Loan Counseling and Financial Wellness Programs

Managing student debt can be overwhelming, especially when employees aren’t sure how to develop an effective repayment strategy. To assist employees in navigating their student loan obligations, employers can offer financial wellness programs, which include student loan counseling.

• One-on-One Counseling: Employees can receive personalized advice on budgeting, loan repayment strategies, and debt consolidation options.
• Workshops and Webinars: Financial wellness workshops can be offered to employees, covering topics such as how to manage student loan debt, investing in retirement, and planning for long-term financial goals.

6. Retirement Plan Matching for Student Loan Payments

Some employers have begun offering a unique benefit: allowing employees to receive a retirement plan match for their student loan payments. While this may seem unconventional, it’s a creative way to help employees build their financial future while addressing their current financial struggles.

• Match for Loan Payments: Employers may match a portion of employees’ student loan payments with contributions to their 401(k) or other retirement accounts. This benefit encourages employees to focus on saving for retirement even if they’re still paying off their student debt.

Vendors Who Can Help Employers Enable Student Loan Repayment and Education Reimbursement Programs

To make the implementation of student loan repayment assistance and education reimbursement programs smoother, many employers turn to specialized vendors that offer tailored solutions. These vendors can provide the technology and expertise needed to administer these benefits effectively, ensuring that employees can easily access support. Here are some trusted vendors employers can consider:

1. Goodly – Goodly is a leading provider of student loan repayment benefits, offering an easy-to-use platform for employers to help employees pay off their student loans. Employers can contribute directly to employees’ loans, and Goodly also integrates with existing payroll systems to streamline the process.
2. Student Loan Genius (part of LendKey) – This platform helps employers offer student loan repayment assistance and refinancing options. Their services include personalized student loan advice and payment tracking, as well as a matching contribution program, allowing employers to support employees in paying down their debt.
3. Tuition.io – Tuition.io is a well-established platform for student loan management, offering customizable repayment programs for employers. Their system integrates with HR platforms and allows employees to see their loan balances, make payments, and access financial counseling.
4. EdAssist – For education reimbursement, EdAssist provides comprehensive solutions that enable employers to offer tuition reimbursement and lifelong learning benefits. They offer an easy way to manage programs while ensuring employees have access to a wide range of educational resources.

By working with these vendors, employers can offer a comprehensive suite of student loan repayment and education reimbursement benefits that promote financial wellness and employee retention.

How HUB Southwest Can Help

Providing student loan repayment assistance and education reimbursement options is a win-win for both employers and employees. It helps employees manage their financial burdens, enhance their skills, and stay engaged in the workplace. At HUB Southwest, we specialize in crafting employee benefits programs that suit the unique needs of your workforce, from student loan assistance to educational reimbursement. Let us help you design a benefits package that will not only help your employees thrive but also boost employee satisfaction and retention.

Reach out to HUB Southwest to explore how we can support your organization in offering financial wellness solutions that address student loan debt and education costs.