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The $5,250 cap applies to both the new student loan repayment benefit and educational assistance under Section 127 of the Internal Revenue Code . As amended, the provision applies to any student loan payments made by an employer on behalf of an employee after date of enactment and through 2025 . ADP Marketplace, an online storefront that offers ADP clients a collection of highly rated HR solutions that integrate with ADP’s platform. As Ajanta searched for additional benefits that could help attract and retain employees, he found LoanBenefits, a solution from ADP that enables his company to offer employees an easy way of paying off their college loans.

You can start with a simple concept, such as asking employees if they would like bonuses as cash or student loan payments, or you can design a more comprehensive plan – it’s up to you. Maximize the impact of your program by promoting it across your organization and community. Encourage those employee referrals for new candidates now that you offer this benefit! Issue a press release announcing your commitment to help the student loan debt crisis by offering this benefit!

Can student loans take my house?

Unsecured Loans
If a defaulted student loan is unsecured, like all federal student loans and most private student loans, the lender must sue the borrower and get a court judgment against the borrower before they can seize the borrower’s property. They can also seize the borrower’s brokerage accounts.

Key features include HR management; payroll and tax filing; time and labor management; talent management and employee engagement; benefits administration; and cross-border capabilities. Education assistance benefits are a powerful way to attract and retain talent, support diversity and inclusion goals, and improve the overall financial wellbeing of your workforce. Tuition.io helps employers design and administer benefits for employees at all stages of higher education. Gradifi works with more than 400 employers across the U.S. to promote financial wellness for employees by offering a single, integrated, cloud-based solution to help reduce student loan debt.

Employees Burdened By Student Loans? Offering This Benefit Could Help

Without adequate support, employees can become trapped in a vicious cycle of student loan debt – preventing them from achieving other critical financial goals and milestones. Your employees are automatically loaded into our system, and the administration is accessed through your ADP Workforce single sign-on, making it quick and intuitive. LoanBenefits™ integrates with your payroll and allows you to make payments directly to the hundreds of banks that hold your employees’ student loans. Consider offering a student loan repayment benefit to help attract and retain employees in today’s tight job market.

adp student loans

The Millennial Benefit Preferences study shows student loan repayment is valued 7x more than other ancillary benefits. This is where student loan assistance benefit programs can differentiate your company, helping you compete for new talent and retain the valuable employees you have. Student loan debt has become a huge burden, especially to Millennials. Student loan debt has more than doubled since the end of the recession in 2009, reaching a record $1.465 trillion. And, the Federal Reserve Bank of New York, Bureau of Labor Statistics and CNBC confirm that the burden is shouldered by over 44 million Americans, which equates to approximately 28% of the U.S. workforce, including 70% of recent graduates. This amounts to decades of student debt burden for employees and a major deciding factor in employees’ life decisions.

Student Loans

In 2019, only about 8% of employers offered student loan repayment assistance, which is up from 4% in 2018 and 3% in 2015, but still not where it should be. Compare that with other critical employee benefits like retirement and health plans–there’s a lot of work to be done. As part of the onboarding process, your employees will receive a free comprehensive student debt review. We will determine if employees qualify for any federal or state student loan forgiveness, review the rates and terms of their student loans to see if they can be improved, and provide other opportunities such as debt consolidation.

Currently, Congress is considering changing student loan repayment assistance to be a tax-free benefit . If Congress were to move these benefits to being tax-free, you could likely see a much larger number of companies offering this benefit.

Hopefully more employers follow the companies below into offering student loan repayment assistance to their employees. Given the fact that roughly 43 million people have student loans, and that the U.S. Workforce is roughly 144 million people, that means almost 1 in 3 workers has student loans.

Is 50k in student loans a lot?

Fifty thousand dollars in student loans may seem like a lifelong commitment. It’s significantly higher than the national average of $28,950 (based on data from 2014 graduates). And it’s higher than the median income for a 29-year-old in the US, which is about $35,000. So you won’t be paying it off overnight.

By increasing awareness and use of 529 college savings plans, employers can help break the intergenerational cycle of student loan debt and give their employees a sense of security while saving for their child’s future education costs. Chances are your current and future employees are grappling with student debt. How can they save for retirement, consider starting a family, buy their first home, or simply enjoy a debt-free life versus living paycheck-to-paycheck?

ADP Marketplace, which is accessible to 600,000 ADP clients, is offering Gradifi’s SLP Plan® , which allows employers to make a regular contribution to pay down an employee’s student loan debt. This allows you to work student loan assistance into your existing benefits scheme without increasing compensation costs.

Student Loan Repayment Can Now Be Offered Tax

And according to a recent survey from Student Loan Hero, 45% of employees would rather have a student loan repayment assistance program over a 401k. Even more startling, almost 53% of employees would prefer to have student loan repayment assistance over additional vacation. The Coronavirus Aid, Relief, and Economic Security Act (H.R. 748, “CARES Act”) was signed into law on March 27, 2020. The CARES Act is the third stimulus bill aimed at providing relief to employers and individuals affected by COVID-19. Below is a high-level summary of the provisions related to small business assistance, tax, retirement, paid leave, unemployment insurance, and direct payment to individuals. Small businesses should work with an experienced financial advisor to carefully assess available assistance programs to determine the interplay and best option for their specific circumstances.

Once the initial buzz is out, keep the momentum going by celebrating employee loan payoffs. Over time, you’ll accumulate impressive stats on your company’s overall impact that can open doors for earned media and positive press. According to Mike Ceretto, VP of people and performance at the award-winning Chicago-based company, Medix chose Peanut Butter’s student loan repayment solution because it wants to ensure it continues to innovate and offer a competitive benefits package. According to Peanut Butter, candidates are willing to accept a job offer 85% of the time when student loan repayment is part of the benefit package. )–Gradifi today announced that its student loan employee benefit platform is now being offered through ADP Marketplace, an online storefront for HR solutions offered by ADP, one of the world’s leading providers of cloud-based human capital management solutions. Gradifi today announced that its student loan employee benefit platform is now being offered through ADP Marketplace, an online storefront for HR solutions offered by ADP, one of the world’s leading providers of cloud-based human capital management solutions.

  • Employers working with Peanut Butter can choose to simply provide employees with student loan resources, or complement loan resources with contributions toward the repayment of employee loans.
  • It also manages the enrollment process for employees and facilitates the relationship between employers and loan servicers.
  • Peanut Butter works with employers to structure a student loan assistance program that makes the most sense for their company.
  • Medix offers a $50-per-month contribution toward student loans that can ultimately help a borrower get out of debt years faster than they would on their own.
  • Gradifi is a market leader in providing financial wellness solutions for a multi-generational workforce.

Even a more modest student debt burden of $53,000 for couples with bachelor degrees leads to a lifetime wealth loss of nearly $208,000. According to the Federal Reserve Bank of New York, today, over 45M of the most qualified American workers hold student debt and 71% of recent college graduates entered the workforce with student loans. In the context of financial wellness, many are now looking to their employers or help. A growing trend in the last few years has been for employers to offer student loan repayment assistance to employees as a benefit. Unlike tuition reimbursement , student loan repayment assistance is a relatively new concept, but one that is gaining traction.

The Bureau of Labor Statistics reports that August’s U.S. unemployment rate was 3.8%, and college-educated unemployment was even lower at 2%, continuing the recent trend of the lowest unemployment rates the country has experienced in years. Perhaps you compete with the likes of Amazon, Google, Facebook and other tech giants, or simply with well-known employers in your area whom everyone wants to work for. Convincing your most qualified candidates they should work for your company instead can seem like a daunting task. Offering a student loan repayment benefit can help employers attract top talent and retain existing employees, and more employers are catching on. Data from the Society for Human Resources Management shows that the number of companies offering student loan repayment doubled from 4 percent to 8 percent between 2018 and 2019. For larger companies, ADP offers Workforce Now, a configurable, cloud-based HR platform. Built on a single database, the platform helps businesses manage people, reduce administrative tasks and stay compliant.

For employers, helping their employees get out of student loan debt just makes sense. The CARES Act increases the maximum loan amount for SBA Express loans from $350,000 to $1,000,000, until December 31, 2020. The CARES Act also reduces the cost of participation in the program by providing fee waivers, an automatic deferment of payments for up to one year, and no prepayment penalties. Gift of College enables employers to offer gift cards for rewards and recognition programs, new hires, new babies and other milestones to save for college and pay down student loan debt. The most rewarding part is the positive financial impact you’ll have on your employees’ debt. An employer-provided $50/month contribution can help the average borrower get out from under his/her student loans in 8 years instead of 10 and save close to $7,000 in principle and interest (assumes $31,000 balance, 6% interest rate, 10-year repayment term). Offering student loan assistance can help maximize your impact and return.

Employees

Peanut Butter works with employers to structure a student loan assistance program that makes the most sense for their company. It also manages the enrollment process for employees and facilitates the relationship between employers and loan servicers. Employers working with Peanut Butter can choose to simply provide employees with student loan resources, or complement loan resources with contributions toward the repayment of employee loans. Medix offers a $50-per-month contribution toward student loans that can ultimately help a borrower get out of debt years faster than they would on their own. Gradifi is a market leader in providing financial wellness solutions for a multi-generational workforce. In addition to the SLP Plan, Gradifi offers Gradifi Refi, which gives employees access to leading student loan refinancing lenders with exclusive offers, at no cost to the employer, to reduce monthly payments and get out of debt faster.

adp student loans

Employees who could benefit from any of these programs will be referred to our debt counselors, who will then help develop a student debt plan. It’s no wonder prospective candidates and current employees find student loan assistance benefits an important consideration when evaluating employers. The Millennial Benefit Preferences study found that candidates are willing to accept a job offer 85% of the time when Student Loan Repayment is part of the benefit package and are willing to stay in a job 36% longer when receiving Student Loan Repayment. As remote work continues for some companies, and others begin to return-to-work, student loan repayment can help employers in every industry boost engagement and productivity, helping alleviate the pressures of student debt on employees. When employers offer student loan repayment, they may see 36% longer employee tenure, 13% faster hiring timelines and increased productivity and attendance among their workforce. If your company offers any type of student loan repayment assistance program, you need to be taking advantage of it.

Gradifi also offers College SaveUp Plan, which allows employers to make contributions to an employee’s existing 529 college savings plan, preventing more student loan debt from being taken on in the future. In addition to the SLP Plan, Gradifi offers Gradifi Refi, which gives employees access to leading student loan refinancing lenders with exclusive offers, at no cost1 to the employer, to reduce monthly payments and get out of debt faster. Peanut Butter’s benefit administration platform makes it easy for employers to offer student loan assistance, including student loan repayment employer-sponsored programs, the most requested benefit of today’s workforce. With our secure environment, seamless integration and program support, your program can be enabled quickly with minimal time and effort from your team. Before student loan repayment assistance, there were tuition reimbursement programs. These are programs that employers offer that provide reimbursement for employees who are going to school. Employers are permitted to provide a student loan repayment benefit to employees, contributing up to $5,250 annually toward an employee’s student loans.

If that sounds costly, consider what you would be willing to pay to increase the number of qualified candidates submitting their resumes. Or, the reduction in employee turnover costs you would see if employees stayed for six to nine months longer. If it still doesn’t seem doable for your company, consider swapping student loan repayment for that free gym membership/free food perk you offer.