PFT #37 - Employers Offering a Student Loan Reimbursement Benefit

For many recent college graduates entering the job market or those considering switching jobs, the first thing is about finding the right opportunity; however, compensation packages should also play a big role.


This is often correlated with salary, time off, health benefits and employer sponsored plans. An additional benefit is tuition reimbursement which is becoming a growing trend due to the student loan debt crisis.


This is also attractive as Joe Biden (as of 8/22/21) and congress seem to be at an impasse to provide student loan forgiveness.


With that being said, just don’t think about tuition reimbursement which is when a student is taking classes while being an employee (see Walmart’s school paid program).


Employers can now reimburse current student loans for employees which is by way of the The Consolidated Appropriation Act of 2021,


Through Dec. 31, 2025, employers can choose to make tax-exempt annual contributions of up to $5,250 per employee toward eligible education debt that includes tuition, fees and books. (See Section 127 of the federal tax code)


In addition, this money does not count toward an employee's gross taxable income.


Hence, the student and the employer benefit.


So keep this in mind as you are job hunting seeing that it takes just over 21 years to pay off the average student loan.


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Episode Link:

Employer Tuition Reimbursement Benefit

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