Employer student loan contributions are a type of employee benefit in the United States. With this benefit, employers pay back student loans on behalf of employees, at certain amount per month as decided by the employer. Companies are using this benefit as a way to attract and retain employees, especially millennial workers. This benefit has grown as education debt has increased. According to the Washington Post, student debt has nearly tripled since the early 1990s and averaged $35,000 in 2015.
Only about 3% of companies currently offer employer student loan contributions, according to a survey by the Society for Human Resources Management from June 2015. Prominent companies that have announced this benefit include Fidelity Investments, PricewaterhouseCoopers, Natixis Global Asset Management, Kronos, NVIDIA and law firm Orrick, Herrington & Sutcliffe.
Companies typically work with a vendor to administer these payments. The main vendors are CommonBond, Peanut Butter, Tuition.io, SoFi, Gradifi, and EdAssist.
Unlike tuition reimbursement benefits, which are currently tax-free up to $5250 annually, employer student loan contributions are taxed as regular income. Several proposals have been introduced in Congress to make employer student loan contributions tax-free.