Student Loan Repayment Assistance Programs: Employer Benefits – When it comes to paying off student loans, the sooner you can pay off your debt, the better. This is particularly true for student loans with high interest rates. Here at , we are passionate about providing the best refund practices. That’s what inspired us to create our platform that allows companies to provide student loan repayment programs to their employees as a benefit.
If you haven’t filed your taxes yet, be sure to take advantage of available student loan tax credits. By taking advantage of any applicable tax breaks, you can pay off your student debt faster and prepare for the year ahead. Check out our tips here.
Student Loan Repayment Assistance Programs: Employer Benefits
One reason why people often get stuck in a vicious cycle of worsening debt is due to fees and penalties for missed payments. You can increase your chances of success through a few different tactics. A simple way is to set up automatic payments. Most servicers offer a small interest rate discount (usually 0.25%) for those who sign up for automatic payments. Be sure to schedule your deduction each month to fit your budget and payment schedule.
Student Loan Updates
If you can’t set up automatic payments, create reminders to pay early. Paying every 3 weeks instead of every month will eventually push you forward on payments. If you forget a payment, you still have time to make the payment without penalty.
Are you likely to get a promotion or raise this year? If so, think about how you can increase payments as your income increases. If you don’t proactively put more money into your student loans as you earn more money, you’ll spend more in other areas without increasing the amount you’re paying on your loans. It’s easy to quickly change your lifestyle if you don’t pay attention.
On the first paycheck you get a raise, sit down and re-budget. You can spend a little more on luxuries, but don’t forget to also increase your efforts to pay off debt.
Even if you aren’t struggling to make payments, that doesn’t mean you shouldn’t consider a payment plan that can lower your interest rate or monthly payments. Both refinancing and income-based payment plans reduce your monthly payment, extending your payment term to 15 years or more. You can continue to make the same payments as usual, but more of your payment will go towards your principal and you will be able to pay off your loan faster. Servicers are no longer allowed to charge prepayment penalties.
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Finally, focus on your future as you work to pay off student debt. Not only is it stressful carrying the burden of debt with you, it can also be a hindrance to other goals like buying a home or planning for retirement. While it may require some sacrifices at first, focusing on how you can plan for your future by paying off your student loans at a faster rate will go a long way in setting you up for future success.
Our platform allows companies to offer student loan repayment programs as a benefit to their employees. We offer expert advice for those who want to plan a better method for paying off student loans. With our program, you can access a network of verified refinance offers to explore viable options for your student debt.
When it comes to student loan payments, make 2019 the year you show renewed focus on getting rid of that heavy debt. Contact our team today to learn more about the unique benefits we can offer employees through our student loan repayment program. Student loan debt represents a $1.7 trillion burden for more than 40 million Americans today. Many employers are taking the initiative and addressing this problem head-on through student loan repayment assistance for their employees. This post will examine student loan repayment assistance, how these programs work, and the benefits for both employers and employees.
Student loan repayment assistance is a benefit solution that allows employers to make contributions towards paying off an employee’s student loan balances. This benefit allows companies to have a direct impact on their employees’ financial situation and address the challenges associated with debt. This capability creates a compelling employee benefit that improves employee satisfaction and retention.
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Generally, there are two ways to work these reimbursement programs. The first is when a company offers to match an employee’s pay up to a certain dollar amount. For example, if an employee chooses to pay $150 a month, the employer will add $150 to the amount to make a total payment of $300 towards the loan.
The second and most common approach is for employers to pay a regular monthly amount for the balance. For example, an employer might choose to pay $100 a month for a total of $1,200 a year.
Regardless of a company’s specific approach to these payments, these programs offer many real benefits to employees. Many of these positive effects interconnect with other benefits, which means that an employer’s student loan repayment program often goes far beyond meeting real needs than other benefits. In many cases, it’s a win-win-win for everyone. Here are just some of the main benefits:
It’s not just the employee who benefits from the employer’s reimbursement program. Employers benefit too, making these programs a boon for both employees and employers. Here are some of the key benefits for employers:
Employee Benefits & Pay
Student loan repayment programs offer real value to employers and employees alike. As you explore your 2022 benefits packages, consider one of these programs for your employees.
Our pay-on-demand benefit gives you a way to improve your team’s performance at no cost. Here are some reasons why our clients choose us to access earned salary: How can people get out of their student loan debt and when is loan forgiveness an option? Statistics show the depth of US college graduates’ student loan debt, and the sums can be staggering for individual borrowers. Fortunately, students can take advantage of income-based payment plans and public service employee forgiveness to ease the burden of their debt.
Only direct loans made by the federal government and Stafford loans, which were replaced by direct loans in 2010, are eligible for forgiveness programs.
If you have other types of federal loans, you can consolidate them into a direct consolidation loan, which can give you access to additional income-based repayment plan options. Non-federal loans by private lenders and lending companies do not qualify for forgiveness.
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In 2020, federal student loan borrowers who attended for-profit colleges and sought loan forgiveness because their school defrauded them or violated specific laws suffered a setback when then-President Donald Trump vetoed a bipartisan resolution that would have overturned new regulations that make it much more difficult to access loan forgiveness. The new, more onerous regulation came into effect on July 1, 2020.
In August 2022, the Biden administration, along with the US Department of Education, approved $32 billion in student loan debt relief for more than 1.6 million borrowers with applications open in October. However, in November 2022, federal courts issued orders blocking the student loan forgiveness plan. On June 30, 2023, the Supreme Court ruled that the Biden administration did not have the authority to write off up to $20,000 in federal student debt per borrower.
For federal student loans, the standard repayment period is 10 years. If a 10-year repayment period makes your monthly payments unaffordable, you can enter an income-based repayment (IDR) program.
Income-oriented programs extend payments over a period of 20 or 25 years. After that time, assuming you’ve made all of your qualifying payments, any remaining loan balances will be forgiven. Historically, payments are based on family income and family size, and are typically capped at 10%, 15%, or 20% of your discretionary income, depending on the plan. As part of the SAVE plan, undergraduate loan payments will be capped at 5% of discretionary income.
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Below are the four types of IDR plans offered by the US Department of Education, along with the repayment periods and monthly payments for each:
An IDR plan can be a good option for people in low-paying careers who have large student loan debt. Eligibility varies between plans, with some types of federal loans being ineligible for repayment under all but one plan. In addition, you will have to recertify your income and family size annually, even if none of them changed from one year to the next.
Applying for an IDR requires you to submit an income-based repayment plan application, which you can complete online or via a paper form, the latter of which you must request from your loan officer. You can choose a specific IDR plan by name, or ask your loan provider to place you in the income-oriented plan you qualify for with the lowest monthly payment amount.
If any of the loans you wish to include in an IDR plan have different loan officers, you will need to submit a separate statement.
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