There are many ways to help pay student loans as an employer–bonuses, regular contributions, one-time payments, a big ol’ bag of cash–but the most tax-advantaged way for both you and your employees is to set up a tax-compliant benefits program to manage your employer student loan payments.
At Highway Benefits, we can help you create, manage, and administer a fully tax-compliant benefits plan that makes automated payments directly into your employees’ student loan accounts.
Schedule a call with our team to learn more.
Highway Benefits makes it a breeze for you to offer employer student loan contributions as a benefit. With our low-lift platform, you can have your program up and running in as little as 2 weeks.
Here's how it works:
That’s it! We know you and your team are busy so we’ve designed our platform to be as low maintenance as possible for your HR team and benefits administrators.
Yes! Highway Benefits supports customization across multiple aspects of your benefits plan including:
We support a high degree of plan flexibility in order to ensure that you can support your employees’ financial well-being, while still using your employer student loan contributions as an effective tool for recruiting and retention.
Reach out to learn more about how we can help you design a customized plan to achieve your talent goals.
Absolutely. We recognize that not everyone has student loans and that employer student loan repayments are part of a class of benefits that may not be taken advantage of by everyone.
But consider the following:
The reality is that every employee’s situation is unique and while not everyone in your company may have student loans, you will make a meaningful difference in the lives of those who do.
Yes. As long as your employer student loan contributions do not exceed $5,250 per employee per year and your education assistance program adheres to the rules set forth by Section 127 of the IRS code, your contributions will be exempt from Social Security and Medicare payroll taxes.
No. Employer student loan payments are not considered taxable income for employees as long as the total payment amount does not exceed $5,250 per employee per year and your benefits program adheres to rules set forth by Section 127 of the IRS code.
Not sure how to create a tax-compliant student loan repayments benefit program? We can help! Schedule a call with our team today to start setting up your plan.
As a general rule of thumb, you can expect that ~30% of your employees have some amount of student debt. According to the most recent data from the U.S Department of Education, roughly 45 million Americans out of 157 million employed adults in the US hold some amount of federal student loans (that’s nearly 1/3 of the US workforce).
You can also use our simple adoption rate calculator to get a more tailored estimate! If you're looking to obtain an exact number without having to survey your entire employee base, Highway Benefits can help.
Talk to our team today to learn more.
If your employer offers student loan repayments as a benefit through Highway Benefits, simply sign up for an account using your personal email address and connect your student loans to Highway (if your employer doesn’t offer this benefit yet but you’d like them to, send us a note and we’ll reach out).
Once you’ve connected your student loan accounts to Highway, you’re all set to receive your student loan repayments benefit as long as you meet all your employer’s eligibility requirements.
Each processing period, Highway will verify your eligibility for the student loan repayments benefit and automatically deposit your employer’s contribution directly into your student loan account within 60 days.
If you’d like your employer to offer this benefit, send us a note letting us know who to contact and we’ll reach out! Many companies aren’t aware that employer student loan repayment is now a tax-free benefit so the first step is just to get the conversation started. We can help.
There are also plenty of steps that you can take to put this benefit on your company’s radar. Talk to your HR partner and ask them what the best way to suggest new benefits is. Does your company send out a regular benefits survey? Suggest it in the next survey. Does your company have an employee committee that weighs in on benefits? Find a way to connect with them.
We recommend using your primary personal email address (the email your employer has on file) so that you can continue to access your Highway Benefits account, in case you change companies in the future.
If you leave your company, you’ll still have access to your Highway Benefits dashboard if you used your personal email to register for an account. If your next employer offers student loan contributions as a benefit through Highway, you’ll be able to transfer your account to your new company without needing to re-register!
If you didn’t use your personal email but want to update the email address we have on file for you, please reach out to us at email@example.com.
At Highway Benefits, we do our best to instruct your student loan servicer to treat any payment above your monthly minimum as an additional principal payment. However, your loan servicer may feel entitled to handle this at their discretion.
Contact your loan servicer and leave a written directive. You can modify this template from the Consumer Financial Protection Bureau to reflect your preferences and send it to your loan servicer(s) to make sure they apply any overpayment to your loan principal instead of advancing your next payment’s due date. You may also be able to modify your preferences directly in your online account with your loan servicer.
Reach out to us at firstname.lastname@example.org. We’ll do our best to resolve your issue as quickly as we can.
We're open to exploring partnership opportunities. If you're interested in working with us, send us a note.
Yes! Under the CARES Act, any employer student loan contributions (sometimes also referred to as employer student loan payments or employer student loan matches) are considered tax-free income for employees as long as the total payment amount falls under $5,250 per employee per year and the employer contribution program adheres to the rules outlined in Section 127 of the IRS code.
As a bonus, employers do not need to pay payroll tax on any contributions that fall under the established limits.