More Employees Are Getting Access To Student Loan Assistance
Its not only contributions that are increasing at some companies. Eligibility parameters are getting bigger, too.
When Memorial Hermann Health System, based in Texas, introduced a student loan repayment benefit in 2016, the goal was to attract top talent and address a shortage in nurses, says John Eshleman, director of benefits at the hospital system. The program was a quick success Memorial Hermann found first-year retention with registered nurses went up 12% in the first two years of the program.
The company currently reimburses up to $400 a month toward loans attached to clinical degrees or up to $200 toward loans tied to non-clinical degrees. The lifetime cap is $20,000 per employee.
Memorial Hermann started out by offering the benefit only to employees who had graduated in the last three years. In 2020, it was expanded to apply to employees who have graduated in the past five years.
Weve helped our employees reduce student loan debt by over $5 million,” Eshleman says.
In addition to increasing its lifetime max, Fidelity also widened eligibility for its benefit last yer. The company ended a waiting period that required employees to spend at least six months with the company before getting the perk. Now workers can enroll on the first day of employment.
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How To Decide Which Private Student Loan Is The Best For You
While our evaluation of our private student loan partners was created as a starting point for students and their families to find the best private student loan, we recommend you do your own research as well.
When looking for a private student loan, comparing your options is the most important thing you can do. By doing this, youll be able to find an affordable loan that comes with borrower-friendly repayment terms. Here are the steps we recommend taking to find the best private student loan:
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Student Loan Forgiveness Is Not The Same As Forbearance
Forgiveness eliminates your debt forbearance postpones your payments. If you’re having trouble making student loan payments, you can ask your lender for forbearance. Your lender may not give you a forbearance if you don’t meet eligibility requirements, such as being unemployed or having major medical expenses.
Interest on your loan will still accrue, and you can pay that interest during the forbearance period if you want. If you don’t pay it, the accrued interest will be added to your principal balance once your forbearance period is up. Your new monthly payment will be slightly higher as a result, and you’ll pay more interest in the long run.
The only relationship between forbearance and forgiveness is that when you’re in forbearance, since you’re not making payments, you’re not making progress toward the payment requirements of a forgiveness program you might be participating in.
Companies That Help Pay Off Student Loans And Let You Work From Home
If you have student loan debt, you may be able to get help paying it down through your employer or find one that does.
More than 44 million Americans are weighed down by student debt, owing a collective $1.7 trillion.
Now as the “Great Resignation” gains steam and workers look for new jobs, employers are trying to find ways to attract and retain talent. Working remotely and offering help with those loans are some of the perks.
Federal student loan payments, most of which were paused during the pandemic, are set to resume in January.
“It is important for employers to meet employees where they are and find benefits that will be meaningful and provide value to them,” said Toni Frana, a Destin, Florida-based career coach with FlexJobs.
Currently, 17% of employers offer student loan debt assistance and another 31% plan to offer it, according to the Employee Benefit Research Institute’s 2021 Employer Financial Wellbeing Survey.
About 70% of employers said employee engagement in the benefit has increased since 2020.
Here are eight companies that are helping employees pay down student loan debt and also offer work-from-home positions, according to FlexJobs. The average annual base salary is courtesy of Payscale, unless otherwise noted in the job posting.
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Do All Student Loans Qualify
Typically employer repayment assistance works for all student loans, both federal and private, because your employer is giving you cash not a forgiveness benefit that is applied directly toward your loan. You may never see the cash because its all handled through third-party transactions. But its still cash being paid toward your balance regardless of the type of loan you have.
However, there are exceptions. For example, many companies wont repay loans you took out to pay for your kids educations, only your own education loans. Some companies require you to have achieved a degree, or even a certain degree. And one company, Nvidia, requires you to have earned your degree within three years of becoming employed with the company.
What Types Of Employer Repayment Programs Are Available
Student loan repayment assistance is still relatively new territory. Theres no one-size-fits-all program. Companies are offering a variety of types of assistance, all of which can help you save money on your student loans.
Here are some types of programs a company may offer:
- 401 Matches. Struggling to balance paying off debt with investing for retirement? These programs let you do both. Companies like Abbott Laboratories give you a percentage toward your 401 in exchange for you paying a percentage toward your student loans.
- Payment Matches. Like it sounds, employers match whatever you pay toward your student loans, up to a certain cap. For example, if you work for Google and make up to $2,500 in student loan payments in a given year, the company will pay a matching $2,500 toward your loans.
- Cash Payments. By far the most common type of student loan repayment program, this involves a company partnering with a payment platform like Tuition.io, Gradifi, Goodly, or Bright Horizons EdAssist and having the platform pay the employees student loan servicer directly.
- Vested Payments. The same as companies offer employees stock options in their retirement portfolios, companies like Chegg are using an investment model to help repay student loans. They invest money in stock accounts and use the equity to pay their employees loans after theyve been employed with them for two years.
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Companies That Help Employees Pay Student Loan Debt
If paying off student loans is a struggle, you may want to get a new boss.
Helping graduates repay their student loans is a powerful recruiting and retention tool that is becoming more popular among employers.
While a raise is always nice, I like receiving the extra help paying off my student loans because it gives me an incentive to pay them off faster, says Mackenzie Kreitler, who worked at a company with a student loan repayment program. Employees with student debt get up to $2,000 a year toward payments on our student loans, which is a huge help. This benefit has most definitely factored into my decision to accept a position at the company and stay with the company. When you are looking at over $900.00 per month in payments, any extra bit of help goes a long way.
Its easy to see why student debt assistance programs are so attractive to recent graduates like Kreitler. The average college graduate of the class of 2018 had about $30.3K in debt , and student loans are the second-largest source of debt in the United States. American households now owe $1.5 trillion in student loan debt, more than any other source of credit except mortgage debt.
Although troubling, the amount of student loan debt is not the main concern. The real issue is the high rate of delinquency of student loans. In 2018, 11.4% of student loans were delinquent, or 90 days overdue.
Companies That Help Their Employees Repay Student Loans
If a company youre interested in doesnt offer student loan repayment assistance, refinancing might be another way to save money on your student loans.
Edited byAshley HarrisonUpdated May 18, 2022
Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. By refinancing your mortgage, total finance charges may be higher over the life of the loan. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”
Modern employers recognize that they need to offer valuable benefits to attract and retain new employees which is why many of them now provide assistance to help their team members pay off student loans.
Keep in mind that in many cases, this perk is reserved for top performers or long-term employees.
Heres what you should know about companies that repay student loans:
Recommended Reading: How To Wipe Out Student Loan Debt
How Likely Is It That The Government Will Cancel Student Debt
The complete cancellation of federal student loans is unlikely. President Biden has voiced support in the past for canceling $10,000 of student debt per borrower, while Democrats like Senators Elizabeth Warren and Chuck Schumer, the majority leader, are pressuring the president to cancel $50,000 per borrower, by executive action if necessary.
Sandy Baum, a nonresident senior fellow at the Urban Institutes Center on Education Data and Policy, said in an email that she suspected that the administration might target forgiveness to specific groups of borrowers, like those who were victims of fraud and abuse. But blanket forgiveness, whether by executive action or by legislation, seems unlikely, she said.
Companies That Will Help You Pay Off Your Student Loans
More businesses are catching on to the loan crisisand offering a solution to recruit new hires.
America has a student loan problem to the tune of $1.5 trillion. That number is shocking on its own, but even more troubling when you drill down and realize most college graduates today owe an average of $30,000 according to Student Loan Hero. Today, about 8% of companies are offering some version of student loan repayment as a benefit, similar to 401k matching, as a way to entice younger hires and keep employees happier. So what do these benefits actually look like? Every company does it a little differently, but the rewards for employees are undeniable across the board.
For those looking for jobs in healthcare, Aetna offers highly competitive benefits. Their student-loan repayment program is for both full- and part-time employees, and offers to match up to $2,000 annually for team members. This was based on the companys holistic view of health, which includes financial health. But for more traditional wellness lovers, theres also a healthy lifestyle incentive program that offers cash bonuses for a positive lifestyle.
New York Life Insurance
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Create Your Personal Student Debt Relief Program
Arent you curious about how much you could save with a student loan refinance? Would you like to calculate the exact savings youll enjoy if you pay your student loan early?
You dont have to wait for Congress or your employer to start your student debt repayment program. Find out how you can repay your student debt faster and reduce your interest payments with a student loan refinance.
Andrew is the Content Director for SuperMoney, a Certified Financial Planner®, and a Certified Personal Finance Counselor. He loves to geek out on financial data and translate it into actionable insights everyone can understand. His work is often cited by major publications and institutions, such as Forbes, U.S. News, Fox Business, SFGate, Realtor, Deloitte, and Business Insider.
Things To Consider About Student Loan Reimbursement Benefits
If youâre searching the job market, or if your employer is offering you student loan repayment assistance, youâll want to make sure you understand how these kinds of benefits programs work. Most importantly, youâll want to be able to tell whether any given repayment assistance program is really worth it.
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Student Loan Repayment Vs Tuition Reimbursement
Student loan repayments are a fringe benefit offered by some employers . The company gives eligible employees funds specifically to pay off student loan debt incurred prior to working for the company.
Though loan repayment assistance is a company benefit, it is also a taxable benefit.
Tuition reimbursement is also an employer-provided benefit, but it reimburses your tuition for classes you take during your employment. Generally, you pay for the class or classes upfront and then get reimbursed for it like you would any other expense.
While loan repayment assistance is taxable, tuition reimbursement may not be taxable. It depends on the class or classes you take and why you are taking them. If the classes are work-related, the tuition reimbursement is likely tax-exempt. However, consult with a tax professional for your specific situation.
Ask Your Hr Department About Student Loan Repayment Assistance Using This Email Template
When it comes to asking your employer for this benefit, Yonadi recommends being open and transparent. He adds, “You can simply say, ‘I’ve got some debt burden from this education that you require me to have for this position. I want to save for retirement and pay off my debt in a reasonable amount of time. How can you help me?'”
If you want to ask your employer to consider offering student loan repayment assistance, here’s an email template you can use:
I recently learned that employers can offer student loan repayment assistance as an additional benefit.
Section 2206 of the CARES Act states that employers can make tax-exempt payments of $5,250 per year directly to each employee’s federal student loans. This was only supposed to be in place in 2020, but it was extended to December 31, 2025 through Section 120 of Division EE in The Consolidated Appropriations Act of 2021. A summary of the provisions can be found here, on the National Law Review website.
Personally, I have in federal student loans and my monthly payments are . I’m sure I’m not the only one who feels the pressure of student loan debt, so I wanted to speak up and advocate for the needs of employees at this company.
Will consider offering this benefit in the future?
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Are Student Loan Repayment Benefits Worth It
Student loan repayment benefits can shave months or even years off your student loan repayment term and save you money in the process. But you can’t base your decision to take a job on this alone.
If a company offers student loan repayment benefits but pays a much lower salary than you could earn somewhere else, it might not be worth it. You’re better off going with the company that’s going to pay you more, especially since you’d pay taxes on your student loan repayment benefit anyway.
Consider everything an employer offers, including salary, health insurance, retirement benefits, work-life balance, work environment, and educational benefits when deciding which company is right for you. Keep an eye out for new companies in your field that may offer student loan repayment assistance and consider switching jobs if it makes sense.
If you’re considering a company that offers student loan repayment assistance, make sure you understand all the terms. Ask:
- if you must work for the company for a certain number of months or years before you’re eligible,
- how much you might get per month or year,
- whether there’s a lifetime cap, and
- if there are other requirements you must meet to claim the benefit.
Weigh all these factors before deciding to apply to a company just because it offers student loan repayment assistance.
How We Chose The Best Private Student Loans
Since 2014, LendEDU has been reviewing private student loan lenders to determine the best in the industry. Our most recent evaluation consisted of 12 of our partners, including several of the largest in market share.
Here are the seven categories that we reviewed to score each lender:
Once we scored each lender, we then determined who was the best for different situations. If a lender wasn’t the best for anything, or they didn’t allow borrowers to choose between in-school or deferred payments, they were not included on this page.
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