How to Educate Employees on Student Loan Employer Benefits
If your company has already decided to offer employees student loan repayment assistance under Section 127 of the Internal Revenue Code, then you have made an exciting choice.
If you have no idea what we’re referring to, then it is certainly worth reviewing the new legislation that was signed into law at the end of 2020.
Either way, as Congress has now extended this law through 2025, it is a great idea to make sure that you know how to educate your employees (and refresh ourselves) about this new employer student loan repayment program.
What are Student Loan Repayment Assistance Benefits?
In an attempt to stimulate the workforce, the US congress passed a law in 2020 that allows employers to help pay their employees’ student loan debt. This law was extended through 2025. This should not be confused with the Public Service Loan Forgiveness Program, which is a benefit specifically for full-time employees of a U.S. federal, state, local or tribal government, or a non-profit organization.
Our friends at SHRM explain “Through 2025, employers can continue to make contributions of up to $5,250 per employee annually toward eligible education expenses, like tuition or student loan assistance, without raising the employee's gross taxable income."
What started as a part of the CARES Act is now a portion of the Consolidated Appropriations Act, 2021. But more importantly, the number of employers offering student loan repayment is rising daily.
According to SHRM, “Some employers say adding this benefit provides an important opportunity to differentiate themselves. Standing out is viewed as particularly important in a healthcare industry that has seen high levels of burnout and turnover during the COVID-19 pandemic.
How to educate employees about the student loan repayment employer benefit
If this is a perk that your firm has opted to offer, or may plan to offer, there are a few key ways that you can educate employees about their new student loan employee benefit.
Become an expert
As an HR professional, you already know how vital it is to be an expert on your employee benefits offerings. Student loan repayment benefits are the same. Make sure that you understand what your company is offering, if there are any additional requirements (like matching funds), and how your company plans to extend the benefit.
Don’t forget, the law allows funds to be distributed directly to employees, or paid to their federal student loan service provider. Make sure you have a plan for either or both.
Offer a seminar
Once you have the plan, and know the specifics, put together a meeting. This will be a very popular employee benefit, so expect a high turnout! If you are planning a company meeting, or an event around open enrollment, make sure you plan time for questions about this new benefit as well.
Offer an information campaign
With or without a seminar, a well-executed information campaign will help your employees know about their student loan repayment assistance benefits, including your desired next steps.