5 Ways Your Employer Can Help You Pay Off Your Student Loans


If you’re on the job hunt, you probably have a list of “must haves” from any potential employer—a certain salary, access to a 401(k) or other retirement plan, health insurance, etc. Maybe a reasonable commute and an occasional free lunch. But have you ever stopped to wonder whether or not your job could help you pay back your student loans?

It turns out, that’s a real possibility. As more and more employers realize the toll that student loans can have on their employees, a whole new kind of employer benefit is beginning to take shape: One with a goal of making it easier for you to pay off your loans.

So whether you’re a new college grad looking for your very first job or you’ve already been making student loan payments for years, keep an eye out for these five employer benefits that can help you save thousands of dollars as you work towards your goal of paying off your student loans.

1. Student Loan Repayment Assistance

Student loan repayment assistance is a fancy way of saying that your employer helps you pay off your student loan balance. The process typically looks something like this: You make your regularly scheduled monthly student loan payment, and your employer contributes some extra cash so that you can lower your balance faster. Exactly how much you receive will, of course, depend on your employer, but commonly it amounts to an extra $50 to $100 per month.

That might not seem like a lot, but over time the impact can really add up. If you have a $30,000 student loan balance with an interest rate of 6.8%, and your employer contributes an extra $100 a month to help you pay it off, you would save more than $3,500 and pay off your loan three years ahead of schedule.

According to a recent survey by the Society for Human Resource Management (SHRM), only 4% of employers currently offer student loan repayment assistance as a benefit for their employees. It’s largely believed that this is because offering the benefit does not currently come with a tax incentive for the employer. But a proposed law being considered aims to change this. If it passes, and employers suddenly find themselves able to write off a portion of the expense of offering the benefit, a lot more companies are likely to begin offering it.

You might be wondering: Why doesn’t the employer just give that money to you in your paycheck? While they could, the obvious temptation for you would be to spend the money on something else besides lowering your student loan balance.

2. Matching 401(k) Payments

Most employers who offer a 401(k) retirement plan to their employees will offer some kind of company match to encourage you to actually contribute towards your retirement. The specific math can get a little complicated, but if your employer offers a 401(k) match, it probably works like this: You make a contribution to your 401(k), and your employer “matches” that contribution—up to a certain dollar amount, or percentage of your salary.

Some companies are putting a new spin on this concept that specifically benefit employees with student loans. These employers make matching contributions to the 401(k) accounts of employees who are repaying their student loans, typically up to the same dollar amount or percentage of salary as applies to their regular 401(k) match.

The idea behind the policy is that employees with student loans who either don’t have the extra money to contribute to their retirement or who are aggressively trying to pay down their loan balance shouldn’t be punished for the fact. It is essentially an extension of the 401(k) match to those who have not been able to take part. As with student loan repayment assistance (above), a recent ruling by the IRS may open the door for more employers to begin offering this benefit to employees.

Just over 52% of Millennials choose to opt into their employer-sponsored retirement plan, and many experts believe this to be due to the burden of student loan debt that Millennials (and Gen Zers) carry. As most Americans are woefully underprepared for retirement, the impact this benefit for individuals struggling to repay their student loan debt can’t be overstated.

3. Trading Vacation Time for Student Loan Assistance

If you’re anything like most Americans, there’s a good chance that you don’t always use all of your vacation time. In 2017, it’s estimated that Americans accumulated and wasted more than 705 million vacation days, and that more than 52% of Americans left at least some unused vacation time on the table. While some of that time got rolled over into the next year or cashed out, 212 million vacation days were forfeited—a total of around $62 billion in benefits.

However depressing that fact may be, it’s becoming more and more of the norm in our always-on, work-obsessed culture. Luckily, if you’re one of those people who never seem to use up all of your vacation time before the end of the year, you may one day find yourself able to convert those unused days into a student loan payment.

One employer, Unum, has recently begun allowing employees to trade up to 5 days (40 hours) of unused vacation time for a check to be applied to their student loan balance. Right now, they seem to be the only employee offering such a benefit, but if it proves popular it could easily spread to other employers.

4. Tuition Reimbursement/Tuition Assistance

Most employers understand that an educated workforce is an efficient and productive workforce. That’s why 92% of companies offer some kind of tuition reimbursement or assistance for employees seeking to continue their education. So long as you can show that the degree or course you are interested in relates to your job and can make you a better worker, chances are pretty good that your employer offers some kind of program to help you cover the expense.

Exactly how much is covered depends on the employer’s policy, but the most common amount of assistance typically falls somewhere in the range of $5,000 to $7,000. And yet it’s estimated that only 2-5% of employees with access to these programs actually use them. The reasons for employees not using the programs range from simply not knowing the programs exist to worrying that seeking additional education might make it seem like they are thinking about finding a new job—but it’s important to remember that your employer would not offer the program if they didn’t want you to use it!

The best way to avoid the struggle of student loan debt is to avoid taking out student loans in the first place, and many employers offer tuition reimbursement programs to help you do just that. If you’ve got access to a tuition reimbursement program and you have a desire to earn a degree or certificate, make sure you use it!

5. Helping You Understand Your Options

Even if your employer doesn’t offer a formal student loan assistance program, that doesn’t mean that they don’t care about helping you get and stay out of debt. In many cases, companies employ an HR official who is knowledgable in personal finance, who other employees can turn to for advice or ask questions about a range of topics, from questions about retirement and insurance to mortgage and student loans.

This is particularly true of employers that are non-profits or public service employers. Why? Because employees at these types of businesses are often eligible for student loan forgiveness after a certain number of payments have been made. Unfortunately, navigating the red tape of forgiveness can be challenging. That’s why the Consumer Financial Protection Bureau (CFPB) created this packet to help employers help their employees understand the path to forgiveness.

So, even if your employer doesn’t offer one of the benefits mentioned above, don’t be afraid to turn to your HR department with any questions you might have. You might be surprised at how helpful they can be!

The Bottom Line

If you are currently on the job-hunt, make sure that you take the time to truly understand the benefits being offered by your potential employers. You might just be surprised by the different ways that they might be willing to help you pay back your student loans. Even if you’re not currently looking for a job, consider taking a look at your benefits package or talk to your HR representative to find out if you are currently leaving money on the table that you could be using to pay off your student loans.

About Tim Stobierski

Tim Stobierski is the founding editor of Student Debt Warriors. A freelance writer and editor with a passion for teaching people about all things personal finance, his goal is to help parents and students tackle their student loan problems so that they can live happier, healthier lives. Tim's writing has appeared in a number of publications, including The Huffington Post, The Hartford Courant, Grow Magazine, and others. His first book of poetry, "Chronicles of a Bee Whisperer," was published in 2012 by River Otter Press.

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