Student Loans Aren’t Going Anywhere

Given what’s been going on with the political climate, much of how inflation, recession, or the Department of Education is going to play out is untold. However, if we can say one thing confidently, it is that those student loans aren’t going away, and your employees still need to pay them.

According to the Student Loan Debt Statistics for 2025:

• Student loan debt in the U.S. has crept up to $1.777 trillion
• Federal student loan debt amounts to 92.2% of all student loan debt
• Private student loan debt stands at 7.79% of all student loan debt, including $29.3 billion in refinance loans
• Average federal student loan debt balance is $38,375
• Total average student loan debt balance (including private loans) is up to $41,618

Financial stress not only has an impact on your employees’ mental health it also lowers job performance. A Gallup survey has shown that as an impact of Student loan debt, 71% of people put off buying homes, cars, and other big life goals like starting a family.

How can Employers help?

The rising cost of education and the burden of student loans have made loan assistance a sought-after benefit. Employers can support employees by contributing directly to their loan repayments or providing financial planning resources.

Employer contributions towards employee student loans help reduce the repayment period and save interest dollars for the beneficiaries. Usually, the contributions are capped to a lifetime maximum, and there’s a before and after employment length clause for eligibility. As a result, the benefit serves as both an effective talent attraction and retention strategy, precisely why more and more organizations are offering it. There are ways in which your organization can offer this benefit.

Ways to Implement Student Loan Repayment Benefits

Cash Contributions:

The most common type of employer contribution towards an employee’s Student Loan Debt is through a monthly cash input over and above the employee’s existing payment towards the loan. Most organizations start with $100 per month and have a benefit upper limit or a fixed term. Many hospital systems and large healthcare systems were early adopters of this benefit as they fight for talent. Some of Edcor’s Clients contribute $100 – $500 a month, or a one-time payment of up to $10,000.

Employee Payment Equivalent Contributions:

These are cash contributions equivalent to the employee’s payment towards the Student Loan Debt. There is an upward maximum of this contribution. However, the employee needs to make extra payments beyond their monthly minimum to get the maximum benefit of such programs. Some employees choose their bonus or sign-on bonus to be paid directly to their loan holder, often after 90 days or 6 months of service. This amount is usually up to the $5250 tax limit, but in some cases, it could be up to $10,000.

Most organizations include these contributions as a part of fringe benefits via third-party Specialized HR benefits providers – like Edcor – who offer Student Loan Repayment assistance services. The services are broadly categorized under Repayment assistance, Refinancing or Financial planning, and Counselling resources for Client employees.

How can Edcor help?

Edcor can help your organization design the Student Loan Repayment benefit to reach strategic goals such as recruitment or retention, automate it, and then manage the day-to-day moving forward.

Edcor’s Freedom™ solution for Student Loan Repayment programs takes care of your employee’s financial wellness while freeing up time for you to focus on other strategic work. At a high level, Edcor’s Freedom solution would pay the loan holder/servicer directly on the employer’s behalf. In most cases, the eligible employees continue to make their minimum monthly payment on their student loan, and the organization’s contribution goes on top, shortening the payoff period and saving on interest.

Edcor can also support a variety of Student Loan Repayment program structures.  We can also manage loan repayment programs that contribute a percentage of annual profit sharing to the employee’s student loan debt. Additionally, Edcor can manage 401 (k) match programs where the employer matches a percentage of student loan payments made during the year by the employee and contributes it to the employee’s 401 (k). This helps the employee still save for retirement while paying off their student loan debt.

Edcor’s unique offering to Clients in the Freedom service line includes flexible and customized solutions, advising for HR policy writing tied to upskilling and retention goals, and linking of the employee’s student loan repayments and tuition assistance to the CARES Act Sec 127 for benefit maximization. Reach out to us for more information.

Also, read about our Debt-free degree program to help learners combat student loan debt.

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