More Companies Consider Helping Workers Pay Student Loans
A big factor is that under the federal government’s pandemic relief programs enacted in 2020, employers are able to make tax-exempt loan repayment contributions to their employees of up to $5,250 a year through 2025. Employees don’t have to pay income taxes on the benefit. (Previously, unlike tuition assistance payments for employees enrolled in college, loan-repayment contributions were taxable.)
McLaren Northern Michigan Hospital in Petoskey, Mich., is among the employers that have added a direct assistance benefit. The hospital began offering student loan aid this month, joining two other hospitals in its health system, said Todd Burch, McLaren Northern’s president and chief executive.
It has become especially difficult to keep nurses, Mr. Burch said, because they are increasingly able to work on lucrative mobile assignments as travel nurses. “We’re looking for unique offerings to recruit and retain top talent,” he said.
The benefit is available to all employees after they have worked at the hospital for six months and pays $200 a month in the first year, $300 monthly in the second year and $400 monthly in the third year, with a maximum benefit of $12,000. (Benefits are prorated for part-time workers.) Already, 91 employees have applied for the benefit.
McLaren works with Goodly, a start-up that manages student loan payment benefits for companies. Workers submit their loan information to Goodly, which verifies the worker’s eligibility and transmits payments from the employer to the lender.
Esker, a software company with U.S. headquarters in Wisconsin, began offering the benefit in 2019. The company generally hires workers directly from college, so education loans are often a concern, said Anne Donarski, the company’s director of finance and administration.
“We know student debt is becoming an increasing burden,” she said.
Employees are eligible from their first day on the job, but the contribution increases with their tenure at the company — from $100 a month to start, up to $150 a month, payable over five years. The company has about 200 employees, and 55 use the benefit. Esker has so far paid about $186,000 in loan help, Ms. Donarski said.