5 Reasons you should adopt a Student Loan Repayment Program

Did you know that you can give your employees a payment, tax deductible for the business, of up to $5,250 a year to assist with student loan repayments? The CARES Act recently introduced this program, and it is not too late to act.

By Kelly Pallanti, SHRM-SCP, Senior HR Consultant
12th August, 2022
Kelly Pallanti is a mission-driven HR consultant. She believes that people (humans) are the invaluable driver that advance the mission and values of an organization, and that HR should be there to support them. Her extensive work with YMCA has led her to work with over 500 Cause-Driven leaders by sharing her ‘Y Story.’

Under the 2021 update to the CARES Act, employers can offer a lump sum payment, spread it over 12 paychecks, or pay the loan servicer directly. Here are 5 reasons why you should consider the adoption of a Student Loan Repayment Program

Retain employees by demonstrating you care about their financial wellbeing

In today’s competitive job market, the question of how to retain employees is a key concern for many managers.

Retaining employees can be achieved by demonstrating that you care about their wellbeing, including financial health. Offering a student loan repayment program is an excellent way to achieve this.

Improve employee engagement by reducing financial stress

Financial stress can lead to a lack of engagement at work. This is because employees are not able to focus on the work and their tasks when they are constantly worried about their financial situation. This leads to lower productivity and higher absenteeism rates. Student debt is a significant source of financial stress, especially for those at earlier stages of their careers.

Gain a competitive advantage in recruiting

In such a tough job market, all employers should be thinking about their Employer Value Proposition and how they can stand out from the crowd when it comes to attracting talent. Competition for talent is fierce, especially for recent graduates - and offering student loan repayment assistance can be a significant factor in attracting that demographic.

Advance opportunities for women and BIPOC employees

It is an unfortunate truth that women and people of color carry the highest debt burden in our society. Offering a Student Loan Repayment benefit is a small but important way to show your support by doing something meaningful.

Tax benefits

All assistance paid under a qualifying program is tax free for the employee, and tax deductible for the employer.

How can I implement a qualifying program?

Contact us today for a free CARES Act Student Loan Repayment Program Guide, that helps businesses and nonprofits adopt a program that meets the standards of the updated provision of the 2021 CARES Act update. The guide includes an implementation checklist, customizable templates for all required records, forms, and employee communication.