Helping Employees Pay Student Loans Is a New Incentive to Attract and Keep Top Talent
The cost of a college education has skyrocketed in the last few decades. About half of all college students graduate with debt, and the average amount owed is just under $30,000.
Many employers recognize the massive financial burden their employees with student loans are currently facing. Simultaneously, employers across the country are struggling to attract and keep high-quality workers. In response to these concerns, more and more employers are offering various types of student loan relief to employees. The CARES Act has paved the way for employers to offer student loan repayment by changing the way student loan assistance is taxed. Student loan assistance used to be treated the same as the employee’s regular wages. Fortunately, the CARES act has temporarily changed that. Through 2025, employees do not have to pay income tax on student loan repayment income. Furthermore, employers do not have to pay payroll taxes on the money they provide to employees for student loan repayment.
If you are an employer or business leader looking for new ways to attract top talent, you may want to consider offering student loan repayment as an employment perk.
Enticing Workers Through Student Loan Repayment Perks
Debt of any type can be financially burdensome and emotionally taxing, but student loans often weigh heavily on the hearts and minds of employees. Consequently, student loan assistance is seen as a major benefit. It is no surprise that Google, Fidelity Investments, Estée Laude, Peloton, and other companies have already taken advantage of this opportunity.
Small and medium-sized businesses have been slower to hop on the student-loan-repayment bandwagon, but statistics show that offering student loan assistance may be a huge incentive to potential employees. One study found that a whopping 86 percent of young workers would be willing to make a five-year commitment to a company if the company offered student loan repayment assistance.
Call Us for Help
Student loans represent a major financial burden – especially for people in their 20s and 30s. As employers are forced to find innovative ways to attract and retain talented employees, many are turning to student loan assistance perks.
At the Gierach Law Firm, our Naperville business law attorneys know that growing a successful business requires creativity and tenacity. We help small and medium-sized businesses find customized solutions to a wide range of business concerns, including employment issues, tax planning, contract review and drafting, and more. Call our office at 630-756-1160 for a confidential consultation.
Please note: These blogs have been created over a period of time and laws and information can change. For the most current information on a topic you are interested in please seek proper legal counsel.