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“exploring Employer Assistance With Student Loan Repayment”
Dan is a writer for the ‘How-To’ team. His byline has appeared in The New York Times, Newsweek, NBC News, Architectural Digest and elsewhere. He is a crossword junkie and is interested in the intersection of technology and marginalized communities.
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As lenders prepare for student loan payments to resume in October, more companies are looking for ways to help employees deal with their student loans.
Adidas has joined the ranks of companies offering student loan assistance benefits to their employees. The iconic sportswear company, which employs roughly 10,000 US workers and reports revenue of $23.71 billion in 2022, announced the perk in early June, just weeks before the Supreme Court struck down President Joe Biden’s plan to lend borrowers up to $20,000 in student loan forgiveness.
Adidas will contribute up to $100 a month toward loan payments for eligible full-time employees in any department, including retail, distribution and corporate.
“Paying for an education shouldn’t hold our teammates back, so we’re happy to support them with this benefit,” adidas North America president Rupert Campbell said in a statement.
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Edward Gottfried, director of product management at Betterment at Work, says the recent Supreme Court case and the end of the payment freeze in October have put student loan assistance “at the forefront of the benefits debate.”
Betterment is one of several companies that manage student loan benefit solutions for employers. Others include SoFi at Work, Vault, Gradifi, Tuition.io and Highway.
According to research by Betterment, 57% of employees think their boss should help them pay off their student loans. And 85% said they would leave their current job for one that offered more financial help with student loans.
Conversely, 86% of workers said they would stay with the company for five years if they could take advantage of the student loan repayment perk.
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“Companies that want to stand out from the pack and show workers that they care about reducing the financial burden should consider exploring new and innovative benefits they can offer to support borrowers,” Gottfried said via email.
The volatile economic turn of the past few years has led employers to cut their benefits budgets, Gottfried said, so companies need to make sure what they offer is what employees want.
“Our data shows that while demand for traditional benefits like 401(k) remains strong, employees are also preferring emerging benefits like student loan matching programs,” he said. “By providing the benefits employees want, HR teams can stretch budgets while increasing employee satisfaction in today’s economy.”
Benefits vary by company, and employers may have different offers based on position or seniority. But typical plans offer matching funds or predetermined recurring monthly payments for your loan, either from the company or from a benefits provider like Gradifi or Betterment.
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There is usually a maximum dollar amount you can earn, and some employers require a minimum amount of time on the job. If you have multiple loans, the funds can be directed to the largest loan or the one closest to being fully paid off.
Not all workers have student loans, of course, and education benefits can take a variety of forms, from tuition reimbursement to college savings accounts for employees with children.
According to a June 2023 survey by the Society for Human Resource Management, only 8% of employers offer student loan benefits. But experts say the number is rising as employers try to attract and retain quality candidates.
“It’s becoming more common — not only among Fortune 500 corporations, but also among midsize and small companies,” said Kristen Carlisle, general manager of Betterment at Work. “Employees are asking for it. The bottom line is shaping the demand story.”
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An athleticwear company offers full-time employees $100 a month for at least one year to pay off their outstanding student loan debt.
The health insurer will match student loan payments, up to $2,000 annually, for full- and part-time employees. The lifetime maximum is $10,000.
Working with Gradifi, Carvana contributes up to $1,000 a year to help pay off student loans for full-time employees.
Estée Lauder — which owns Clinique, MAC Cosmetics and Origins — contributes $100 monthly toward student loan payments for full-time employees, with a $10,000 cap.
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Employees who work at least 30 hours per week can earn $180 monthly contributions toward their student loans, with a cap of $15,000.
Those working between 20 and 29 hours are eligible for up to $89 per month, capped at $7,500.
First Republic works with Gradifi to offer $100 monthly student loan payments that increase the longer the benefit is used, up to $200 per month. There’s no lifetime cap — you can stay in the program until your loan is paid off in full.
In 2020, this Connecticut-based investment and insurance company partnered with Gradifi to begin contributing to the student loans of qualified employees. Eligible registered employees can access $125 in supplemental payments toward their loans, with a lifetime cap of $10,000.
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After six months on the job, full-time Live Nation employees are eligible for up to five years of student loan repayment assistance of $100 or $6,000 per month, whichever comes first.
New York Life partnered with Vault to contribute $170 per month for employee student loan repayment assistance for up to five years, totaling $10,200.
Working with Gradifi, the publisher offers full-time employees who spend one year with the company up to $1,200 in annual reimbursement benefits, capped at $9,000.
PwC associates can receive up to $1,200 annually toward their student loans for up to six years or until they are promoted to a managerial role.
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SoFi employees have been able to get $200 per month toward their student loans since 2016, with no annual or lifetime limits.
The office-supply superstore is partnering with Tuition.io to offer $100 a month in student loan repayments with a cap of $3,600 to top performers nominated by their managers.
The largest employer in the US, the federal government offers student loan repayment assistance to employees with a balance of at least $5,000 through the Federal Student Loan Repayment Program.
Eligible workers who have been employed by the government for at least three years can receive up to $10,000 a year for up to three years or until their loan is repaid.
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Beginning in 2017, eligible employees at Western Union are able to receive a $50 monthly contribution toward the principal balance of their student loans. The contribution is sent by Gradifi directly to the employee’s loan provider.
The 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act ultimately enabled employers to make tax-free contributions of up to $5,250 annually toward employee student loans through 2025.
The 2019 Setting Every Community Up for Retirement Enhancement (SECURE) Act allowed workers to set up tax-advantaged 529 accounts of up to $10,000 a year for student loan repayments. Signed into law in December 2022, the FollowUp Secure Act 2.0 will allow employers to make tax-free 401(k) contributions that directly match their workers’ student loan payments.
According to a 2022 survey by the nonprofit Employee Benefit Research Institute, only 17% of companies reported offering student loan loan assistance in 2021. Last year this figure increased to 25%.
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Craig Copeland, EBRI’s director of wealth benefits research, said interest is growing as we move away from the peak of the pandemic.
“Employers still need to be creative to attract and retain workers in today’s tight labor market,” Copeland said. Even if a company isn’t in the best financial shape, Copeland added, the cost of a loan assistance program can ultimately be less than replacing critical employees.
“Student debt is a huge concern,” he said. “With repayment and forgiveness no longer allowed beginning in October, employers can differentiate themselves — or stay ahead of their competition — by adding student loan assistance benefits.”
Now is a great time to bring up student loan repayment benefits with your employer, as interest and payments resume.
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“Go to your people team and ask them if they’re thinking about it,” Carlyle said. “Explain why it can help the company as a whole and maybe come to the table with some provider names.”
At the very least, don’t underestimate how beneficial this benefit can be: On average, employees with undergraduate student loans have higher 401(k) balances than their unencumbered colleagues, the Society for Human Resource Management reports.
Adoption of student loan assistance as an employee benefit is still slow, and laws are only now taking effect that make it easier for companies to get on board.
“Covid kind of put everything on pause, with companies focusing on emergencies and healthcare,” said EBRI’s Copeland. “Now, the focus is returning.”
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