Student Loan Assistance 101 – A Primer on Plan Design and Best Practices

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If you’re in HR or benefits, chances are you have heard about student loan repayment assistance. Given the millions of young professionals saddled with student debt, employer payment assistance is rapidly becoming one of the most sought-after benefits in today’s workplace, with companies from Fortune 500 giants to tech startups to even municipal employers like the City of Memphis now offering the benefit.

The process is straightforward and the value is immediate: employers make a fixed payment every month, the amount can vary (usually $100 to $200), to pay down the outstanding principal of an employee’s student loan.  This accelerated principal reduction can take years off the life of the loan and save the borrower thousands of dollars in interest. is Plansource’s QuickConnect Partner for student loan repayment assistance.  Companies like Staples, Live Nation, and Fidelity rely on our platform to securely manage their payments to servicers and banks.  We outline the most important considerations when designing and implementing a student loan assistance plan.

The first thing to consider: what is the overall objective of the plan?  We’ve identified three major areas of performance the benefit can target: engagement, retention, and recruitment.  Plans can be specifically tailored to improve or increase the company’s performance in these areas.


To incentivize worker performance, the number of monthly payments can have a base level but be set to rise and fall based on KPIs rather than be fixed.  By tying the benefit to individual performance, it rewards high performers as they can see their debt decreasing more every month as a result of their efforts.


To increase retention and reduce employee turnover, plans can be designed where eligibility only starts once a new employee has been at the company for a certain period of time.  Another retention-based perk is that the monthly payments can increase the longer the worker is in the plan.


To use the benefit as a way to entice top prospects, the plan can give a larger lump sum payment, say $1,000, upon joining the company.  This is similar to a signing bonus and makes the prospective hire feel immediately valuable.

Once the plan objective is identified, the company can design a plan that optimizes participation and overall impact.  Here are the basic stages of plan design and implementation.

Identify Who is Eligible

Deciding on plan eligibility is tied to the objectives.  Eligibility can be company-wide, or it can be limited to new hires, to certain geography (cities with higher costs of living), or to workers in key skill groups or functional areas.

College graduates

Identify Contributions

When deciding on contribution amounts, the key parameters are payment amount, duration of the plan, a cap or maximum benefit allowed.  In addition, the frequency of contributions (most choose monthly), and whether or not the contributions are performance-based.  Other considerations include if parents can get contributions for a child’s loan (with Parent PLUS loans), or if the payment is grossed up to cover taxation on behalf of the employee.

Define the Launch Timeline

The timing of the plan launch/enrollment availability can be ongoing or can be set during specific times of the year (holiday, summer, etc.).  This timing can be a part of tailoring the plan for specific goals (i.e. recruitment during a slower time of year).

Communication is Key

Office workers

Finally, the last and most important consideration in implementing a student loan contribution plan is communication.  In any plan, even ones for which all employees are eligible, only a minority will enroll.  Not all eligible workers have outstanding student loans.  Which is why it is crucial to communicate to all workers – especially to senior management and veteran employees who are further removed from their college years – why student loans are such a larger burden today, and why helping some workers improves the overall performance of the company.  Management and HR execs can frame student loan assistance as just one of the available benefits and can show other workers who don’t need this help that they are getting other benefits that are equally valuable.



Established in 2012, is the nation’s first and most comprehensive employer-funded student loan repayment assistance program. Providing companies with assistance in designing a meaningful employee benefit, the means to confidently and securely deliver ongoing payments to employees’ valid student loans. is helping companies like HP, Staples, and Fidelity recruit, retain and engage their college-educated workforce.

You can learn more about our partnership here.

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