Student Loan Benefits: Everything you need to know

Student Loan Benefits: Everything you need to know

Engage, retain, and recruit with Student Loan Benefits

With 52% of employees expected to look for a new job this year, student loan benefits are a key differentiator in the competition for top talent. In this post we'll review student loan benefits. We'll explore

  • Why student loan benefits are an essential part of any benefits package
  • Why student loan benefits are a relevant, impactful, and affordable option
  • Best practices for setting up a student loan benefits program

Recruiting and retaining top talent is a primary goal for every successful business. Companies that are consistently able to recruit and retain that top talent do so by differentiating themselves with a trifecta: culture, benefits, and compensation – in that order.

The competition for talent was fierce even before the pandemic. During the pandemic most people were grateful to have a job. Turnover was almost non-existent as people scrambled to figure out how to work remotely. We were all on edge as friends and family found themselves without work as businesses were forced to downsize or shut their doors. As we learned to adapt to the new normal, we had a chance to really focus on what was most important in our lives.

Now that things have stabilized, people are hesitant to go back to pre-pandemic norms. We are asking for more meaning at work and want jobs that provide us more than just a salary. Recruiting and retaining top talent has never been harder. In this new world, the competition for talent is brutal. The most successful companies are adapting to the times by improving their total compensation with better benefits fitting the needs of their teams.

Student loan benefits are the number 1 desired perk after health and paid time off. 90% of people we've surveyed say they would commit 3 years of service for access to student loan benefits. If you want to recruit and retain that top talent you need to provide student loan benefits.

Student loan benefits: when an employer makes contributions to their employees' student loans

Recent legislative updates allowing tax-free, employer-sponsored payments to employees’ student loans have many companies considering the new benefit as a way to recruit and retain talent.

For good reason: 94% of professionals say they would be more willing to stay with their employer for student loan benefits. With 52% of employees expected to look for a new job this year, student loan benefits will be a key differentiator in the competition for top talent.

The need for relevant, impactful, & affordable benefits

The global pandemic has impacted every aspect of our lives. It’s changed our perspective on work as a result. A renewed focus on family, health, and financial security have many questioning whether their company is aligned with their life goals. As a result, better compensation and benefits is the top reason people are considering switching jobs. Employees are leaving in search of better culture, benefits, and compensation and it's hurting employers. A lot.

The Work Institute estimates the cost of turnover can range from 33% up to 200% of the departing employee’s salary. For a median income earner with a Bachelor’s degree, that’s $18,051 per employee ... on the low end.

The cost of lost productivity, replacement searching, the hiring process, and onboarding add up quickly. Not to mention impacts to team morale and continuity with customers.

This puts companies that successfully distinguish themselves in a unique competitive position. Not only will they save thousands of dollars from reduced turnover, their chances of capturing available talent improves drastically.

Employers are left with a few options: increase compensation or adjust their benefits offering.

Increasing compensation is a costly solution. Forbes estimates the average raise an employee receives for leaving is a 10% to 20% increase in salary. Shelling out that kind of cash to keep one or two of your star performers may make sense, but is not sustainable company-wide.

Adjusting benefits offerings is a more reasonable strategy. Following the shift to remote & hybrid work, many companies are already reassessing how relevant and impactful their offerings are.

Relevant, impactful, & affordable.


A study by the American Institute of CPAs asked millennial job seekers to rank their top three desired employee benefits. 41% said they want student loan repayment as an employee benefit, third to health insurance and paid time off.

When asked to split $100 between student loan benefits and other benefits, young adult job seekers put $61+ towards student loan benefits.

In a study by Student Loan Hero, 45% of employees said they prefer student loan assistance over a 401(k) plan. It’s no wonder 90% of professionals are more likely to accept a job offering student loan benefits.


This preference for student loan support among employees is not surprising. 54% of employees say financial challenges cause them the most stress in life. For many, the center of this stress is student loan debt. Contributing just $100 per month to a new graduate's student loans gets them out of debt 2.5 years faster and saves them almost $12,000 over the life of the loans.

The student bebt crisis at a glance

Reducing financial stress with student loan benefits makes a meaningful impact on your employees. Lower financial stress is proven to increase productivity and morale, lower absenteeism, and increase engagement among employees.

Engaged employees stay with their employer longer.


Most student loan benefit programs offer between $85 and $150 per month towards their employees’ student loans. Given median income among Bachelor degree recipients – that’s about 3.3% of annual salary.

The cherry on top: thanks to the CARES act and the Consolidated Appropriations act student loan repayment contributions are tax deductible for employers and do not count as compensation (and so are tax free) for recipients. Offset against the gains in retention, offering student loan benefits can positively impact your bottom line.

Given the savings these programs boast in terms of lower turnover and tax deductions, the number of employers offering student loan benefits has doubled in the last few years according to the Society for Human Resource Management (SHRM).

So what exactly is a student loan benefit program?

Student Loan Benefits

Student loan repayment assistance is a benefit program in which an employer makes contributions towards their employees’ student loans.

Program Design

The key to an effective student loan benefit is the program structure. The best performing programs determine eligibility based on both role and tenure then offer a tiered incentive structure aligned around your goals and budget.

Here are a couple of examples we see across the Companies we work with at Dolr

  • Most popular: all fulltime employees are eligible for student loan benefits on day 1. They start off getting $50/mo which increases by $50 every 12 months until a maximum of $250/mo.
  • Fixed monthly: all full and part time employees are eligible for student loan benefits after 3 months. Eligible full time employees receive $100/mo and eligible part time employees receive $50/mo.

Tax Incentives

Speak with your tax professional to confirm these provisions apply to your business.

The last 24 months have seen immense legislative progress in incentivizing employer participation in student loan repayment with attractive tax incentives for both employers and the employees.

Here’s a quick recap:

These provisions added the repayment of qualified education loans as defined by the IRS to be considered an educational expense under IRC Section 127: Educational Assistance Programs. The same portion of the tax code that allows tuition reimbursement programs to be tax-free.

Employers can now claim contributions to student loan repayment under an educational assistance program as a tax deduction and employees receiving the benefit will not see an increase in their adjustable gross income.

Implementing a Student Loan Benefits Program

There are 3 components to a winning student loan benefits program

  1. Feedback from your team
  2. A program that works for you
  3. A partner dedicated to your success

1. Feedback from your team

Including your team in the program design process ensures buy-in and program participation. Sending a simple survey to gauge interest, debt load, and participation is a great way to keep everyone involved.

Send us an email to to access to our free Student Loan Benefits Survey

The results may surprise you. More often than not, Companies we work with at Dolr are surprised by the number and variety of people on their teams bearing the burden of student loan debt. It's worth mentioning that a majority of people without student loans support offering a student loan benefit. They see the impact it has on their team mates.

Finally, having good information about how many people on the team will participate helps with eligibility and program sizing.

2. A program that works for you

With feedback from your team and a better understanding of participation you can size your program to fit your goals and budget. As with any benefit you should review and adjust your program at least once a year based on performance and feedback from your team.

It's common to start with a standard program then evolve the program to meet recruiting or retention needs across various deparments and roles.

3. A partner dedicated to your success

Any partner you choose should offer you all the flexibilty you desire and create minimal additional overhead for you.

It's important to consider the contracts, pricing, and complexity for any vendor you're considering. It's generally a good idea to steer clear of vendors requiring minimum participation or contributions. It's also prudent to avoid entering into long term contracts. Finally, offering a student loan benefit should not be a stressful or time consuming effort.

At Dolr, we're proud to have the lowest-lift & highest-reward offering available. With no minimums, no long term contracts, & transparent pricing. Companies are delighted by how easy we make it to bring this impactful benefit to their teams. It's a simple as adding your team & choosing your program. We do the rest.

Reduce Turnover with Student Loan Benefits

Student loan debt is a societal problem requiring a societal solution. Providing student loan benefits meets a real need for your team and is a relevant, impactful, and affordable solution. Especially with the tax benefits of offering this type of program.

The demand for student loan benefits continues to grow. To maximize the impact of such a program to both employee and employer it is critical to pick a partner that understands your needs.

Get in touch with Dolr to discuss your student loan benefits program.