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Student Loan Repayment As a Job Perk: How it Works

Young woman enjoys student loan repayment as a corporate benefit.

In the quest to attract and keep the best employees, some companies are getting creative. The best bosses know that cash is only one thing new graduates are looking for in a good gig. Smart young professionals also want sign-on bonuses, stellar health insurance plans, investment options and paid leave.

To set themselves apart, some out-of-the-box thinkers are offering the perk of helping employees with student loan repayment.

Why Student Loan Repayment Perks Work

The move makes sense. What would you rather do with a few extra bucks today? If you’re a recent or soon-to-be graduate, would you invest the money in your future retirement or would you put it toward your debt? It makes little sense to earn returns on a few bucks in a retirement account while you’re bleeding out interest on other loans.

According to a report cited by CNBC, over a third of millennials who don’t contribute to a company-sponsored retirement plan cite outstanding student loans as the main reason.

And, as you may know first hand, millennials represent only a fraction of the 40 million Americans burdened by school loans. Tons of Gen-X’ers and Baby Boomers also dread the monthly payment that symbolizes their education.

How Student Loan Repayment Perks Work

According to Gradifi, the Boston start-up credited (no pun intended) for initiating the new trend, users first create an account. Then, their employers establish an SLP, or “Student Loan Payment” plan. Every month, employers pay between $100 and $250 per graduate into a Gradafi account that administers payments to the loans’ creditors. The concept is simple: If bosses simply boosted take-home pay, the cash would likely not be applied toward the debt. If, however, it’s sent to an administrator like Gradifi, it’s guaranteed to go where it’s intended.

Perhaps the only way this hot new corporate benefit falls short is in the tax department. When you contribute a portion of your paycheck to retirement investments, health savings accounts, or even tuition reimbursement, you or your employer -- sometimes both -- get a tax break. Not so with student loan repayments. If your company decides to offer help with old school loans, you won’t reap the same tax benefits of the other more traditional perks.

What it Means for You

At this point, only a handful of reputable companies are offering the benefit of student loan repayment. However, it’s a growing trend. And as with many new perks, implementation can be complicated, making it seem like employers are dragging their feet.

As you get acquainted with the things you value most in a workplace, it doesn’t hurt to make it known that you’d really appreciate such a program, but don’t demand it. Sharp graduates are worth competing for, but not if they act like they’re entitled to certain perks. After all, other job applicants may prefer benefits like philanthropic outreach or table tennis breaks more than chipping away at debt, and employers must consider the wishes of all their employees.

If you’re behind on your unsecured debt payments and juggling other loans on top of student debt, CESI can help. Speak with a non-profit debt counselor today.


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Consumer Education Services, Inc. (CESI) is a non-profit service provider of comprehensive personal financial education and solutions for all life stages and for all of life’s milestones. Our goal is enhanced economic security for everyone we serve.


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