How Employers Can Help With Student Loan Debt

They have several options that could help, depending on their budgets and goals.

As monthly federal student loan payments are set to resume in the fall, more employees are requesting access to assistance and repayment programs. And employers say they want to help.

A recent study by Ramsey Solutions ranked student loan repayment assistance as the second-highest benefit offering that plan sponsors are considering implementing in the next year or two, behind only financial wellness.

Fidelity Investments estimates 44 million Americans owe a combined $1.67 trillion in debt, and workers are urging the federal government, as well as their employers, to assist in paying down the balance. 

“Student loans are a financial stressor for millions of Americans, and when you’re taking a holistic financial picture, you are often looking at what you can afford to do,” says Amanda Hahnel, director of emerging product at Fidelity Investments. “They’re spending a significant amount a month on student loan debt.”

Employers that are thinking about how to help their workers struggling with the debt load have several options, Hahnel adds. First, they can provide a benefit that focuses on a debt strategy.

“Employees can grab information about their student loans, receive some customized guidance on what their payment options are and how they can estimate their financial needs, and understand how all of those student loans come together in one full picture,” she says. Adding this first glimpse of their full financial picture can immediately relieve a portion of that financial stress, Hahnel explains.

From there, if an employer has a budget that allows it to set aside some money for student loan debt repayment programs, it can offer benefits to help pay off the debt. Fidelity Investments, for example, currently offers a student direct help benefit where employers can contribute to their workers’ student loans, and a student debt retirement tool. “[With this tool], if you pay off your student loans, your employer will actually make a contribution to a retirement fund to help prepare you for the future,” Hahnel says.

Laurel Taylor, CEO and founder of, a technology platform that works with clients on student debt management and repayment needs, says she has noticed that some employers took up a provision of the Coronavirus Aid, Relief and Economic Security (CARES) Act that allows plan sponsors to make $5,250 of tax-free contributions per employee toward eligible education expenses, including tuition or student loan assistance, without raising an employee’s gross taxable income.

For employers that do not have a budget dedicated to student loan repayment, Taylor says they should encourage their workers to enroll in income-driven repayment plans, where a monthly student loan payment is set up based on income and family size. Doing so encourages employees to pay off their debt while taking into consideration other financial needs. “Employers that don’t have the budget still want to bring meaningful tools to their employees that help them better manage and accelerate the paydown of their debt,” Taylor says.

Employers can also consider implementing tuition or wellness reimbursement plans and use the budget from those programs to help employees pay down student debt, Taylor says. She notes that she has seen a trend with tech-driven clients that work with in which employees can file student loan debt as a wellness expense instead of electing other options such as a gym membership or pet insurance.

“In the past, you could submit a $100 expense for a gym membership, but if the only wellness reimbursement options are luxury options, then we’re excluding the financially insecure from that program,” Taylor says. “If I’m an employee and I’m paying down my student loan debt every month, I should be able to submit that as a wellness reimbursement and apply it to my student loan debt.”

According to information from Fidelity’s Student Debt Tool, employees working in the health care industry—who have already faced a year of turmoil battling the coronavirus pandemic—have among the highest student debt burdens at $690 a month, which is $100 greater than the second-leading industry.

“With the pandemic and all other constraints and stressors, [health care workers] average more on student debt and are really facing a lot of pressure because of the degrees it takes to do their job,” Hahnel says.

Taylor, who works with public and 501(c)(3) employers, says she has seen a number of these plan sponsors using the CARES Act $5,250 student loan debt provision. She urges these employers to also direct employees to student loan repayment programs, along with public service loan forgiveness plans, given the relatively low income of some of these workers.

“Many caregivers that are working for qualifying institutions are actually making below-market income,” Taylor says. “These hospitals are trying to figure out ways to really demonstrate that they are the best to work for and that they care about their people,” and one way to do that could be through help with student loan debt.