Employers are increasingly responding to the needs of an indebted workforce by offering student loan repayment as a benefit. The number of companies that provide this benefit has doubled over the past year, from 4% to 8%, according to the 2019 Employee Benefits Report, a survey by the Society for Human Resource Management (SHRM).
Companies that offer an employer student loan repayment benefit often use providers like IonTuition or Gradifi, and offer a monthly benefit — typically about $100 — over a certain number of years, or up to a lifetime maximum. Borrowers who use this benefit to make extra payments will pay off their debts faster and pay less in interest.
Consider this: A student loan borrower with $27,000 in loans at an interest rate of 5% who pays $286 a month will be debt-free in 10 years and pay $7,320 in interest. But with $100 a month from an employer’s student loan repayment benefit added to the loan payment, the borrower shaves off over three years of payments and saves $2,282 in interest.
Here’s what employer student loan repayment benefits look like at 10 major U.S. companies:
Benefit details: Full-time employees: match up to $2,000 per year, with a $10,000 lifetime maximum. Part-time employees: match up to $1,000 per year, with a $5,000 lifetime maximum.
Industry: Marketplace lending
Benefit details: $1,200 per year, until the loan is paid off.
Industry: Skin care and makeup
Benefit details: $100 per month, with a lifetime maximum of $10,000.
Industry: Financial services
Benefit details: $2,000 per year, with a lifetime maximum of $10,000.
Industry: Events promotion
Benefit details: $100 per month, or $1,200 per year, with a lifetime maximum of $6,000.
Natixis Global Asset Management
Industry: Asset management
Benefit details: $1,000 annual benefit — up to $83.33 per month, for a lifetime maximum of $10,000 over 10 years.
New York Life
Benefit details: $170 a month with a lifetime maximum of $10,200 over five years.
Benefit details: Recent graduates (within the last three years) can apply for reimbursement of $6,000 each year to help repay student loans, up to $30,000.
Penguin Random House
Benefit details: $100 per month, up to $9,000 for up to 7.5 years.
Benefit details: $50 per month, with no lifetime maximum.
Industry: Professional services
Benefit details: $100 per month, or $1,200 per year, for up to six years.
Industry: Office supply retail
Benefit details: $100 per month for 36 months.
How to assess employee benefits
Employer student loan repayment is still rare compared with other benefits like health insurance and retirement match programs. Its availability is on par with benefits like receiving a company-provided fitness tracker (8%) and even less common than a perk such as pet health insurance (15%), according to the SHRM survey.
Employer student loan repayment is still rare compared with other benefits like health insurance and retirement match programs.”
When you’re offered a job or are comparing employers, experts say to look at the entire benefits package and weigh what will affect your life most.
“If an employer does not provide student loan repayment, my advice is not to let that be a disincentive from joining that employer,” says Chatrane Birbal, senior advisor of government relations at SHRM. An employer may not offer student loan repayment, but they could offer other valuable benefits.
Benefits like educational stipends are more common to find and can further your earning potential, without adding to your debt. More than half of employers who responded to the SHRM survey provide educational assistance for schooling, compared with a small fraction who have student loan repayment.
That may be because employers receive tax breaks for offering tuition assistance — and employees aren't taxed on this money, up to $5,250 — but not for student loan repayment. However, the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, amends the tax code so student loan repayment contributions are treated the same as other education assistance programs through January 1, 2021.