The Great Resignation has employers asking themselves: What am I doing wrong? Are my wages competitive enough? Am I reaching the right people? These are all important questions.
At Workmorphis, we help our partners ask themselves what they could be doing differently to stand out from the competition. Competing in a tight labor market requires an innovative approach when culture and benefits often matter as much or more to job seekers than compensation. One key factor that is increasingly driving candidates’ decision-making is student loan debt.
Student loans are making headlines for a variety of reasons. Notably, economic consequences are high when graduates delay investments for years because of student loan debt. In a post-COVID economy defined by flexible employment arrangements and work from home opportunities, 73% of millennials and 62% of Gen X respondents report delaying buying a home and putting down roots because of student loans. More than half of recent graduates are worried that they’ll need to work two jobs to make their payments. Another 38% delay saving for retirement, and 40% delay investing anything at all.
Recognizing the debt crisis faced by graduates today, employers can stand out by offering student loan repayment assistance to attract and retain top talent.
Dolr helps employees navigate their loans and find new ways to lower their monthly payments while offering a seamlessly integrated, low-overhead experience for employers. According to co-founder and CEO Naveed Iqbal, Dolr’s purpose is to “create joy” for borrowers by helping them repay their debts sooner while helping employers attract and retain top talent.
What is Student Loan Repayment Assistance?
Student loan repayment assistance is a benefit program in which an employer sends money to their employees’ student loans.
Program Design
The key to an effective student loan repayment assistance program is the program structure. The best performing programs determine eligibility based on both role and tenure, then offer a tiered incentive structure aligned with goals and budget.
Tax Incentives
The last 18 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:
- The CARES Act of 2020 allows employers to contribute up to $5,250 per employee per year in student loan repayment assistance under an Educational Assistance Program. The Consolidated Appropriations Act of 2021 extends this provision until January 1, 2026.
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.
Speak with your tax professional to confirm these provisions apply to your business.
Reduce Turnover with Student Loan Repayment Assistance
Student loan debt is a societal problem requiring a societal solution. Providing student loan repayment assistance as a perk meets a real need for your team and is a relevant, impactful, and affordable solution. The demand for student loan repayment assistance as a perk continues to grow. To maximize the benefits of such a program to both employee and employer, it is critical to pick a partner that understands your needs.
About Workmorphis
Workmorphis provides a full suite of services to help organizations across the U.S. revitalize their workforce, including workforce planning strategies, skills transformation, diversified workforce pipeline strategies, employee support and empowerment, and more.
Connect with us at 877.999.7717 or info@workmorphis.com to offer your insights or learn how we can help you transform your workforce.
About Dolr
Dolr is a Columbus-based Fintech accelerating its members to $0 student debt by surrounding them with the help they need to overcome their biggest financial burdens. Dolr connects its members with extra cash for student loan repayment from where they work, live, and shop.
Meet the Authors
Naveed Iqbal is the CEO and co-founder at Dolr, a Columbus-based Fintech focused on tackling the student debt crisis by surrounding people with the help they need for their biggest financial burdens. He is experienced in data science with bank scale data and product development and delivery of consumer-facing financial products at the largest bank in the country. Naveed holds a PhD in Applied Mathematics from the Florida Institute of Technology. In his spare time, he enjoys reading, exploring the outdoors, and baking.
Emily Fabiano is the founder of Workmorphis, a cross-sector workforce consultancy helping organizations build a more resilient workforce to thrive in a changing economy. Fabiano has deep experience in workforce transformation at the government level, working at the cross section of workforce strategy, economic development, and public policy. With a keen understanding of the unique challenges facing today’s and tomorrow’s workforce and the ability to communicate across sectors, Fabiano brings a new level of understanding and collaboration required to connect industry and education and prepare people for jobs.
Nicholas Klein is a consultant at Workmorphis where he focuses on project execution and policy strategy. He specializes in labor market-driven solutions and is passionate about advancing policies that create economic mobility. Nick is a two-time graduate of The Ohio State University, earning his Master of Public Administration (MPA) from the John Glenn College of Public Affairs in 2022 and his BA in 2016. In between, he worked in the entertainment industry. His favorite things include action-adventure video games, history, indie and Americana music, and science fiction movies.
