Student Loan Repayment Program Offers Tax Credits for Employers
The Connecticut Higher Education Supplemental Loan Authority’s new program allows employers to help employees with student loan repayments, a service increasingly attractive for prospective employers.
The Employer Student Loan Repayment Program is offered jointly by CHESLA and the Rhode Island Student Loan Authority.
It is open to all employers in Connecticut, and includes a special communication plan for each company to help employees understand the program.
Beginning in 2022, Connecticut will offer a tax credit to employers who pay down CHESLA Refi CT loans on behalf of their employees.
CHESLA assistant director Josh Hurlock said the plan can help employers with recruiting employees and encouraging them to stay with the company long term.
“We believe this program will provide Connecticut employers with a significant recruitment advantage while reducing employee financial stress, especially during these unprecedented times,” he said.
Executive director Jeanette Weldon added, “We are proud to continue CHESLA’s track record of providing innovative products and programs to help Connecticut students, families, and recent graduates finance the cost of higher education.”
Recruitment, Retention Benefits
A recent survey found 86% of employees would commit to a company for five years if the employer helped pay back their student loans, according to CHESLA.
Six of 10 adults with student loan debt said they would consider switching jobs to work for an employer who helps pay off college loans.
The federal government offers a number of incentives to businesses who offer student loan repayment programs for both federal and private loans.
Employers who opt into the programs can make tax-free payments of up to $5,250 per employee, employees save on federal income taxes, and both employers and employees save on federal payroll taxes on qualifying payments.
The CHESLA program will equip employers and their employees with specific tools, including repayment counseling, and an online dashboard.
The program manages and tracks payments and sends monthly status reports to employees.
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