Student Loan Repayment 101: 2020’s Hottest Employee Benefit
December 11, 2019
Jill Garrison
Timer  Read Time: 12 minutes

Chances are, you’ve probably heard about student loan repayment as an employee benefit. Many large employers have rolled this handy financial wellness perk into compensation packages as a way to attract and retain talent (especially younger generations) and provide better financial wellness support to employees across the board.

While innovative, student loan debt repayment as an employee benefit might not make sense for every employer. In this in-depth guide, we’ll walk through everything you need to know as you’re considering investing in student loan debt repayment, including a breakdown of how the perks typically works, how much it costs employers and why it’s an important benefit to consider in the first place. Let’s dive in!


What is Student Loan Repayment as an Employee Benefit?

Simply put, student loan repayment as an employee benefit is a program where employers offer dedicated student loan payments towards a student loan principal, on behalf of employees, administered through a third-party.

As of 2017, only 4% of employers offered this service as an employee benefit, making it a relatively rare and appealing perk for potential and current employees. Slowly but surely, employers are seeing the benefit of this particular perk and adoption has increased dramatically, particularly among large employers.


How do Student Loan Repayment Programs Work?

Understanding the mechanics of student loan repayment can seem daunting, but it’s actually fairly straightforward and very similar to other benefits—when you have the right tech in place.

The very simplified explanation is this: 

1.) Choose an administration vendor

2.) Design your contribution plan and benefit eligibility rules

3.) Connect your administrator of choice with your payroll provider

4.) Roll out the program to your workforce and enjoy!

The key to these programs is that the employer contributions are applied directly to the loan principal, which will help employees chip away at the balance and pay off their loans faster. This can amount to a much shorter repayment window and huge long-term savings for employees.

The very first step to launching this benefit is to vet and decide on a student loan repayment assistance vendor. The market offers no shortage of options, and we discuss specific providers and pricing in more detail below.

Across the board, employers vary greatly in how they handle eligibility requirements and disbursements for student loan repayment. Most employers pay the benefit monthly, though you could also choose to offer the payment quarterly or annually depending on your preference.

Additionally, most employers have a lifetime cap limit, which is usually around $10,000—though select employers offer the perk with no lifetime limit.

Most employers only offer the benefit to full-time employees, though some do offer the same benefit or a smaller percentage/amount of repayment to part-time workers. Similarly, most companies require that an employee be with the company for a specified amount of time (ex: 90 days) to become eligible for the perk, while others start repayment from day one.

Notestudent loan repayment programs are not the same thing as tuition reimbursement programs. And, student loan repayment assistance is taxable and will raise an employee’s taxable income, though this would come out of paychecks automatically and should not be a concern or hassle for employees. Several bills have been introduced to change employer student loan contributions to tax-free, so this may change in the near future.


How Much do Student Loan Repayment Programs Cost Employers?

The short answer is, it varies.

Student loan debt repayment programs are incredibly flexible and allow you to customize your contribution amounts and payment schedules.

Specific elements that can vary include the total contribution amount and frequency, the lifetime limit of the perk, who is eligible for the benefit and more.

From a software and administration perspective, this cost also varies greatly from company to company.

Goodly, for example, offers the service for $6/month per participant with free setup and no minimum enrollment. Peanut Butter, another provider, offers two pricing structures—a flat annual fee for company-wide participation or a per participant monthly fee, both of which vary based on organization size.

Then there’s the actual loan repayment contribution. This number also varies and can be any amount. Some companies pay as little as $50 per month per employee while others are contributing upwards of $250 per month per employee.

To give you an idea of what other companies are offering, here are a few examples:

Aetna provides full-time employees up to $2,000 per year for student loans up to $10,000. Part-time employees that work at least 20 hours per week are eligible for 50% of the benefit totals.

Chegg offers employees $1,000 per year in student loan repayment assistance with no lifetime cap. The company also offers additional contributions to employees in their ‘entry to manager’ program and to directors and VP-level employees.

Estee Lauder gives employees $100 per month for student loan debt repayment with a lifetime cap of $10,000.

Fidelity Investments provides employees with $2,000 per year for student loan repayment up to $10,000. Employees must be with the company for at least 6 months to qualify.

Hulu offers employees $1,200 per year for student loan repayment with no lifetime cap.

Kronos offers employees $500 a year for student loan debt repayment with no lifetime cap.

Staples offer qualifying employees $100 per month in student loan repayment for three years.

(via Motley Fool, Student Loan Hero

The ROI of Student Loan Repayment as an Employee Benefit

One of the primary benefits to offering student loan repayment assistance is tied directly to recruiting and retention—particularly when the benefit is offered over time based on tenure.

Let’s apply some real numbers to this hypothetical. Say that the average cost to replace an employee at your company is $20,000 and that your current turnover rate is 10% (which, for the record, is well below the national average of 18%). You currently employ 2,500 people. That means you spend, on average, $5,000,000 per year simply recruiting, hiring and training new employees.

What if you could decrease that number by 25%?

You work with your broker to design a student loan repayment assistance program to attract new talent and improve engagement and retention numbers.

You decide to use a third-party vendor, which will cost $8 per employee per year—a total annual cost of $6,000 for the estimated 30% of employees that will use the perk. On top of that, you contribute $100 per employee per month to student loan debt. This rounds out to a total annual cost of $81,000.

The perk costs $81,000 per year but saves $1,250,000 per year in retention—assuming the 25% improvement in turnover.

This example makes a lot of assumptions but demonstrates the value of increasing retention through strategic benefits, which is exactly what student loan repayment represents.

Why Offer Student Loan Repayment as an Employee Benefit?

There are several reasons why student loan repayment is growing in popularity—and the data supports this.

The current state of student loan debt

To understand why so many companies are investing in student loan debt repayment programs, it’s important to understand the current state of student loan debt.

$1.56 Trillion in total U.S. student loan debt

44.7 Million Americans with student loan debt

$393 Average monthly student loan payment

Additionally, 11.5% of all student loans are 90 days or more delinquent or are in default. Student loan debt is now the second largest consumer debt—only mortgages top the list.

Given the numbers, it’s not hard to understand why the student loan repayment market is booming and is a highly attractive perk for those with student loan debt.

Specifically, student loan debt repayment programs can help achieve several HR and organizational goals:

Support Recruitment—Reduce time-to-hire by 13%

Increase Retention—86% of employees indicate they would stay with a company for at least 5 years with student loan repayment help

Boost Morale—40% of employees rank student debt as their top financial concern

Increase productivity—80% of employees spend 12+ hours per month at work dealing with financial stress

Support Diversity—Women, people of color and the LGBTQ community are disproportionately burdened with higher student loan debt

Fast-Track Financial Freedom—Employees can reduce their payment lifetime by 30%

Increase Engagement—67% of employees with student loan repayment report having less stress and a more positive attitude

What Companies Specialize in Student Loan Repayment as an Employee Benefit?

As student loan repayment assistance grown in popularity over the past five years, it’s no surprise that the market for companies that offer such services has exploded.

If you’re looking for the cream of the crop when it comes to a trustworthy partner that specializes in these services, check out the following market leaders:


Student loan benefits made simple: Invaluable for your team, innovative for you. It’s CommonBond’s goal to provide your company with customizable student loan benefits to support your employees’ ability to pay for school for themselves or their family. They get the support they need, and you attract and retain better talent. For every employee that uses our benefits, CommonBond funds the education of a student in the developing world. Everybody wins.

No pricing available; contact for a custom quote.

Learn more at


Goodly help employers attract top talent, reduce attrition and improve employee engagement. Whether you’re a startup or a Fortune 500, they’ll help you provide benefits to accelerate your employees’ financial wellness. Goodly helps you contribute to your employees’ student loans, on top of their regular payments. Employees can automate payments directly from their paycheck to save on interest and pay-off debt faster. Goodly support companies of all sizes and budgets.

Goodly offers the service for $6/month per participant with free setup and no minimum enrollment.

Learn more at

Peanut Butter

Attract and retain college-educated talent, with ease. Your company determines which employees are eligible for repayment, how much it will contribute, the benefit holding period and when the plan will become effective. Peanut Butter documents the terms, administers the plan and communicates the timing to eligible employees. Need a holding period? Tiered contributions? Multiple plans? No problem, and no extra cost.

Peanut Butter currently offers two payment structures—a flat annual fee for company-wise use or a per participant monthly fee, both of which vary based on organization size.

Learn more at

People Joy

Hire and retain great talent. Assist your employees with student loan benefits. Great talent means experience and education. Reward your experienced and knowledgeable employees. People Joy offers four repayment approaches: financial wellness with ‘Ed’—a student loan concierge, employer matching contribution, educational video library and student loan refinancing.

No pricing available; contact for a custom quote.

Learn more at


SoFi’s unique employee benefits—student loan contributions, refinancing and education—offer an easy and comprehensive way to build financial wellness at your company. Together with a suite of resources and tools like the Student Debt Navigator, these offerings help empower your employees to manage their student debt, regardless of their credit or income. Add SoFi to your benefit program in no time; no integration necessary.

No pricing available; contact for a custom quote.


As the industry pioneer and leader in bringing employer student loan contributions to market at scale, is helping the nation’s best companies free their employees from student loan debt. Over 45 million Americans are affected by student loan debt, the largest personal financial burden our country faces today. We’re proud to help these and many other companies create a meaningful impact on their employees.

No pricing available; contact for a custom quote.

Learn more at

Keep in mind, this is just a quick shortlist of top providers. Many banks, lenders and insurance companies are now offering this service in an effort to take advantage of the growth in popularity. Explore all options and look for a provider that offers robust support and financial wellness education as part of the overall package to best support your workforce.

What are Alternatives to Student Loan Repayment Plans?

Maybe student loan repayment assistance isn’t a good fit for your workforce or maybe the timing isn’t right to get buy-in for such an innovative new program. No matter the reason, rest assured that there are other options.

Tuition Reimbursement

Tuition reimbursement (also known as tuition assistance) is an employee benefit where the employer provides a predetermined amount of money that employees can use to pay for education. Employees front the out-of-pocket cost for taking the course(s) (including the cost of books, supplies, etc.) and then submit documentation upon completion for a reimbursement. Some organizations also require a certain grade to receive the perk or have a scaled reimbursement policy based on course grade to incentivize performance.

Tuition reimbursement payments are a great way to increase retention and foster an environment of lifelong learning. As an added perk, these payments are tax-deductible up to $5,250 per employee.

Personal Loans

60% of households experienced a financial shock in the past 12 months. And more than half of households struggled to make ends meet after their most expensive financial surprises. Despite record low unemployment rates, many individuals and families are living paycheck to paycheck, and an unexpected bill or change in finances can be a tremendous burden.

Personal loans are one way to help employees in their time of need. Through a financial wellness partner, employees have access to low-interest loans to help them pay for unexpected expenses. Then, the loan is repaid through automatic payroll deductions, reducing the friction and hassle of managing the loans manually. Typically, no credit check is required to receive assistance, another added perk to steer employees away from high-interest, predatory payday loans that can further debt issues.

The process varies by vendor, but typically only requires a simple online application with a very quick turnaround time on approval and fund distribution. Employees typically have a cap on how much they can borrow (ex: $500 – $5,000) and are held to an agreed-upon repayment timeline.

Check out companies like TrueConnect, Fundera, and Kashable for more info on affordable employer loans.

Instant Pay

The rise of the ‘gig economy’ has birthed new and evolving technology to help manage this tech-enabled workforce—notably, instant pay apps. Gig workers are breaking the barriers of traditional work relationships in several ways, including how employees are managed and paid.

True to their name, instant pay apps provide instant access to earned wages. Though still a relatively new technology, adoption has spread like wildfire and quadrupled over the past three years—and the demand is there. When asked, over 50% of all U.S. consumers indicated that they would like to receive wages instantly, making it the most in-demand payment method for receiving wages.

Large companies like Wal-Mart have already adopted this approach to providing wages, and other industries like retail and hospitality seem like a natural fit and are sure to follow suit.

“The benefits of the instant pay option are twofold. The employee has more control over when and how they receive their pay, allowing them to meet any pressing financial obligations. For employers, when employees receive this benefit the data shows they tend to stay with the organization longer. Employers increasingly see this as a way to differentiate themselves in tight labor markets where there is flat wage growth.” – Jason Lee, Founder and CEO of Daily Pay. (via SHRM)

Interested in learning more about instant pay? Check out Earnin, FlexWage, Even, and Daily Pay as options.

Financial Counseling Services

If you’re looking for a flexible, inexpensive perk that could apply to and impact a relatively large portion of your workforce, financial counseling services fit the bill.

Many financial wellness companies (see also: your retirement services provider) also offer financial counseling services. These services cover the gamut from helping recent graduates navigate the complexities of saving for retirement or paying off debt to helping financially-savvy employees manage investments and increase their wealth.

In a recent survey, employees at one company revealed that financial counseling led them to achieving various financial goals including reducing debt (60%), setting aside more money for retirement (38%), improving their credit score (30%) and even buying a home (8%).

Check with your financial wellness provider for options and recommendations.

Retirement Accounts

Retirement accounts allow employees and employers to contribute tax-exempt funds into a dedicated account to help employees save for retirement.

There are several different types of accounts available (IRA, 401(k), etc.), and each account has different requirements and nuances.

We’ll let the experts handle the breakdown in accounts—so head over to Nerd Wallet or Motley Fool if you want to learn more.

There are many financial wellness providers that offer retirement account services. Check with your existing partners or your broker for a recommendation on how to best approach and design your account if you don’t already have one, or for tips on how to optimize participation and engagement.

Tip: Check out Jellyvision and Blooom if you’re looking for a handy tool to boost retirement savings education and optimize contribution amounts. 

Learn more about Financial Wellness benefits.

Student Loan Repayment FAQs

Still have a burning question about student loan assistance as an employee benefits? Check our quick FAQ guide for answers, and let us know if there’s anything missing!

Are student loan repayment assistance funds taxed?

Yes, unfortunately, the money employees receive from an employer for student loan repayment is not tax exempt and employees will have to pay taxes on the full amount received. There have been bills introduced to change this, but nothing has been passed—yet.

What companies offer student loan repayment as an employee benefit?

Great question. We listed a few above (Aetna, Estee Lauder, Hulu, Kronos, Staples) but you can find complete lists of companies that offer this perk and how they structure their program on Motley Fool and Student Loan Hero.

What companies provide student loan debt repayment as a service?

Another great question., Peanut Butter, Goodly, SoFi, CommonBond, and People Joy all offer student loan repayment as a service. We do provide a list with details above, so scroll up if you need more info.

How much money do employees get with student loan repayment?

The short answer—it varies. Student loan repayment as an employee perk is very flexible and employers can dictate how much money they contribute, when they disburse payments, lifetime caps for payments, and employment eligibility requirements.

We typically see employers offer around $100 per month towards student debt repayment with a lifetime cap of $10,000. 

Other restrictions may apply regarding employment requirements (full-time, part-time, tenure, status), how long the benefit may apply or how much money will be provided.

How much money does student loan repayment as a benefit cost employers?

Scoping out the cost of a new perk is one of the first question employers often have. Like most things in the benefits world—the cost varies. Most providers will charge either a flat fee or a per employee per month (PEPM) fee for administering the benefit. Be sure to ask about the pricing structure and mechanics of administration when you’re vetting vendors.

There you have it—our quick and easy guide to student loan repayment as an employee benefit. Do you still have questions? Drop us a line below and we’ll connect you with an adviser to help you navigate this exciting new benefit.

Data Sources: Peanut Butter, Goodly, Gradifi, SoFi


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