What does it mean when a job offers student loan repayment?

More and more companies are offering employer student loan repayment programs to help employees pay off their student loans. This benefit gives employers leverage to attract and retain talented workers, and it helps new hires build their careers while paying off student debt.

How does an employer pay student loan deductions?

Student loan repayments are often collected through payroll. A deduction is made from the employee’s pay and paid to HMRC as part of the employer’s PAYE payments. The amount of the deduction is determined by the employee’s level of earnings and the ‘Plan Type’ of the student loan in place.

Does the CARES Act allow employers to pay student debt?

27, 2020, allows employer-provided student loan repayment as a tax-free benefit to employees for five additional years, extending CARES Act relief first made available in March 2020. 31, 2025, employers can choose to make tax-exempt annual contributions of up to $5,250 per employee toward eligible education debt.

Do companies pay off student loans?

With student debt rising, loan repayment assistance is becoming an increasingly popular employee benefit. The number of companies that pay off student loans doubled between 2018 and 2019, from 4% to 8%, according to the most recent data from the Society for Human Resource Management.

Does the CARES Act let my employer pay my student loans?

The Consolidated Appropriations Act of 2021, signed into law by then-President Donald Trump on Dec. 27, 2020, allows employer-provided student loan repayment as a tax-free benefit to employees for five additional years, extending CARES Act relief first made available in March 2020.

How many employers offer student loan repayments?

Prior to Covid-19, about 8% of employers offered student loan repayment assistance as a benefit, according to a 2019 survey by the Society for Human Resource Management.

Can a company help you with student loan repayment?

For employers, helping their employees get out of student loan debt just makes sense. And according to a recent survey from Student Loan Hero, 45% of employees would rather have a student loan repayment assistance program over a 401k. For younger employees (18-24),…

Is the student loan repayment benefit taxable?

The taxability piece is important to note. Currently, Congress is considering changing student loan repayment assistance to be a tax-free benefit (similar to tuition reimbursement, healthcare spending accounts, transportation spending accounts, and more).

How does EY help with student loan repayment?

EY Student Loan offers solutions for repaying student loan debt. EY TaxChat™, our on-demand mobile tax preparation service, connects eligible employees with EY tax professionals who prepare and file their return in a secure, online environment.

Can a 401k contribution be used for student loan repayment?

Unlike student loan repayment (SLR) dollars given directly to employees, which are treated as taxable income, employer 401(k) contributions are not taxable. As a result, this approach achieves tax advantages like those associated with traditional tuition-reimbursement benefits but generally denied to student loan repayment benefits.