How to ask your company to offer a student loan repayment benefit

How to convince your company to offer a student loan repayment (SLR) benefit

Picture this: it’s January 2023 and you’ve resumed paying off your remaining student debt. This time though, you’re able to pay off an extra $100 each month on top of your minimum payment and that loan you thought would take you 10 more years to pay off? Well turns out, you’re able to pay it off in half the time.  

Where did the extra payments come from? From tax-free employer student loan contributions – a newer workforce benefit that allows your company to make tax-free contributions directly to your student loans.

You might be thinking this sounds great and if your company doesn’t offer it yet, you may be wondering how you can get your company to offer a student loan repayment (SLR) benefit. 

Why not just ask? Here are 5 strategies you can use to get the conversation started and convince your company to adopt an SLR benefit: 

1. Bring student loan repayment assistance to their attention
2. Emphasize the financial benefits, especially the tax-related ones 
3. Lead with data and build a business case
4. Share your own story 
5. Connect your company with Highway Benefits

Strategy #1: Bring student loan repayment assistance to their attention

Start with some context! The first step in trying to convince your employer to offer student loan repayment assistance is to figure out what level of existing knowledge they already have about the benefit. Your company may not be aware that they can offer tax-free student loan contributions as an employee benefit OR they may have looked into it in the past but decided not to offer it for specific reasons. What they know will influence what strategies you should use to try and convince them. 

Before you go in for the hard sell, try sending a quick message to your HR team or benefits person first. You can get the conversation started with a simple message like: 

“Hey [NAME], I recently learned that companies can contribute up to $5,250 per employee per year to their employees’ student loans, as a tax-free employee benefit! I’m curious – has [COMPANY] looked into this benefit before?”    

See what they say. If you work in a more formal environment, you can also use this email template:

Strategy #2: Emphasize the financial benefits, especially the tax-related ones 

Your company may not be aware but now, thanks to pandemic-era legislation, employer student loan contributions are currently tax-free (up to $5,250 per employee per year). 

When you speak to your employer about offering student loan repayment assistance, let them know that through 2025, they do not need to pay payroll taxes on any contributions that they make to your student loans and they count the contributions as an expense for the business.

This is also a plus for you since it means that every benefit dollar you receive will not be subject to income taxes, making this benefit more effective than an equivalent increase in salary.  

Why does a tax-free benefit matter to you? 

Since a student loan repayment benefit is tax-free (up to $5,250 per employee per year), every benefit dollar paid towards your student loan will go towards your student loan . If you were to receive that $5,250 as a raise or bonus, you would lose a portion of it to income tax, effectively reducing the total amount you take home.  

Strategy #3: Lead with data and build a business case

In light of all the recent news about student loan forgiveness, your company may be re-evaluating whether or not it should offer a student loan repayment benefit. Your HR team may be wondering: 

• Are employer student loan repayments still relevant even though student loans may be forgiven? (Short answer: Yes. 100%)  
• Would anyone in the company still benefit from a student loan repayments benefit? 
• What would the impact of offering this benefit now be? 
• Are other companies adopting student loan repayments as a benefit? 

You can share some of the following data, tools, and resources to help make your case. 

Are employer student loan repayments still relevant even though student loans may be forgiven?

Yes! While the proposed student loan forgiveness plan has the potential to erase up to $400B in student loan debt, that would still leave roughly $1.2T in outstanding federal student debt (That’s how big the $1.6T crisis is!). 

Remember, the proposed student loan forgiveness plan only forgives up to $20,000 in federal student loans for people who make $125,000 or less; it doesn’t touch private student loans or apply to future federal loans. 

1 in 5 working American adults will still have some amount of federal student debt remaining after forgiveness and, given the current pace of lending, the forgiven amount could be replenished in 4-5 years.

Now is the perfect time for employers to consider adopting a student loan repayment benefit. Companies can help their employees pay down their remaining student loans before the federal payment pause ends on Dec 31, 2022 and interest begins to accumulate on student loans again. 

Would anyone in the company still benefit from a student loan repayments benefit? 

It’s likely that some percentage of the company will still have some amount of student debt, even after forgiveness, especially if your company employs a highly-educated workforce and/or has a median salary of more than $125,000, 

You or your HR team can use our SLR benefit adoption rate calculator to help estimate what fraction of people in your company may have student loans.

If your company wants to find out the exact number of employees with student loans, Highway Benefits can help. Your HR team can schedule a call with us to get started.  

What would the impact of offering this benefit even be? 

To help with your argument, you can also let your company know that there are still a number of great reasons to offer a student loan repayment benefit to employees– not only can an SLR benefit help with company talent goals (i.e. recruiting and retention), but it also can have a huge impact on employees’ financial and mental well-being. 

Not only can an SLR benefit help with company talent goals (i.e. recruiting and retention) but it also can have a huge impact on employees’ financial and mental well-being. 

According to CNBC + Acorn’s “Invest in You” Survey (Jan 2022), 81% of student debt holders have had to delay key life milestones (including saving for retirement, buying a home, having a baby, etc) because of their student debt; 60% said that their student loans negatively impacted their mental health. 

Similarly, a survey by Student Loan Planner found 53% of borrowers with high student debt suffered from depression because of their debt and 9 in 10 borrowers experienced anxiety because of their student debt.  

By offering student loan repayment assistance, your company can tackle a major source of stress for you and other employees, while reducing the amount of turnover, lost productivity, and the associated costs to the company caused by financial stress. It’s a win-win!   

Are other companies adopting student loan repayments as a benefit? 

It may help to do some quick research on what other companies, especially competitors, offer student loan repayments benefits so that you have a response ready for your company, if they ask. 

You can use job boards like Dwindle and LinkedIn to find out which competitive employers are at the forefront of offering SLR and strengthen your case.

Strategy #4: Share your own story 

If your HR team still isn’t sure how employer-sponsored student loan repayment assistance can help employees, try sharing your own story as a concrete example. 

What programs did you take out loans for? How much student debt do you still have? How has it impacted your mental health at work? How does it affect your personal life?  

To the extent that you’re comfortable, be open and honest about your student debt story. Your human story combined with the data could prompt your HR team to seriously consider your request. 

Strategy #5: Connect your company with Highway Benefits

We get it – HR teams are often overwhelmed and busy, so your HR team may be hesitant to add a new benefit that might increase their administrative burden. But adding and managing a new SLR benefit may not be as much of a hassle as they think. 

Highway Benefits makes offering tax-free employer student loan contributions simple and straightforward by helping companies create their SLR benefit plan, automatically verifying employee eligibility for the benefit, and facilitating direct deposits into employees’ student loan accounts.

Our turnkey platform was designed with busy HR professionals in mind–your company can onboard and launch with Highway after a single call and administer its benefit plan with less than five minutes of effort each month. 

Connect your HR team with us and we can help them learn more

Use our free toolkit to help get the conversation started

We’ve put together some free resources to help you ask your employer to offer student loan repayment assistance as a benefit. Use this 1-Pager and email template to ask your employer to consider offering employer student loan repayment assistance. 

You can also share these resources with your HR team to help them learn more about implementing a SLR Benefit. 

If you or your HR team have any questions, feel free to contact us or send an email to suppport@highwaybenefits.com.