By Jasmine Browley ·Updated February 2, 2023
Right now, the national total student loan debt (including federal and private loans) sits at $1.75 trillion. The average borrower took out $28,950.What’s more, the average student loan payment is $460 per month, and it usually takes the average borrower about 20 years to pay off their debts.
So, it’s safe to say people need support with paying down their balances. Luckily, your employer may be able to help.
Through the CARES Act, Americans were given immediate aid to offset the economic hardship caused by the pandemic. This looked like stimulus checks, grants for businesses and student debt assistance. Although it may little known, within the act, it state that employers are to make up to $5,250 in tax-free annual payments directly to their employees’ federal student loans.
This isn’t a new concept. Some companies nationwide have offered student loan repayment assistance for years, but this new provision within the CARES Act makes it so that employers’ contributions are completely tax-exempt.
If your employer hasn’t already mentioned this, it may be time to bring it up. Here’s how, according to the Insider’s email template to your HR rep:
Dear _______,
I recently learned that employers can offer student loan repayment assistance as an additional benefit.
Section 2206 of the CARES Act states that employers can make tax-exempt payments of $5,250 per year directly to each employee’s federal student loans. This was only supposed to be in place in 2020, but it was extended to December 31, 2025 through Section 120 of Division EE in The Consolidated Appropriations Act of 2021. A summary of the provisions can be found here, on the National Law Review website.
Personally, I have (insert federal loan total) in federal student loans and my monthly payments are (insert monthly payment). I’m sure I’m not the only one who feels the pressure of student loan debt, so I wanted to speak up and advocate for the needs of employees at this company.
Will (insert company name here) consider offering this benefit in the future?
Best,
(your name here)
The post Here’s Why You Need To Ask Your Company About Student Loan Debt Assistance appeared first on Essence.
