What’s a benefit that’s sure to attract and retain a large pool
of employees? Answer: Student loan debt repayment.
Currently, a large portion of your employees probably have varying levels of student loan debt. And many probably have significant debt.
The problem with that: It keeps most of them from participating in your retirement plan. Look at it from their perspective. They can pay on a significant financial burden now, or pay for their decades-away retirement.
A repayment program helps employees address this issue.
In addition, it provides a huge opportunity to attract and retain A players.
What you might not know is you have help.
In March of 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act, passed a student loan provision. It allows employers to make up to $5,250 in student loan payments for an employee within a year.
The payments for employees is considered tax-free. And employers don’t have to pay payroll taxes on the money. Most importantly, that’s the case whether the payment goes to the employee or the student loan servicing entity.
Originally, this provision expired at the end of 2020. However, a recently granted extension allows it to go through the end of 2025.
Customize repayment program
Including a repayment program in your voluntary benefits package, allows you to customize it to your specific demographics and budget.
Moreover, your firm can also choose the amount it can contribute to the program. And you can pick the type of program you want to provide: fixed contributions, matching contributions, consolidating loans or refinancing the loan.