Employers continue to combat persistent workforce hiring challenges in 2022 and are raising wages and offering perks to improve recruitment and retention. A recent Ascendium survey with more than 4,300 student loan borrower respondents in the workforce, shares how a Student Loan Repayment Assistance (SLRA) benefit can make a powerful impact for both employers and employees. For example:
40% are likely to seek a new position within the next year.
88% would increase their commitment to their employer if offered SLRA.
Student loan interest rates are reported to borrowers and the Internal Revenue Service (IRS) on IRS Form 1098-E, the Student Loan Interest Statement. During this time of year, 1098-Es are made available to borrowers on their loan servicer’s websites. They're also sent to borrowers via email or postal mail if the interest paid met or exceeded $600. Due to the federal payment pause and zero percent interest in 2021 on Direct loans, borrowers who didn’t pay any interest won’t receive any 1098-E information. Borrowers who partially participated in the payment pause and paid less in interest than in previous years may want to check with the IRS or a tax advisor if they have any questions related to interest deductions. Additional information can be found here and and on loan servicers' websites where borrowers can download their 1098-E information.
More states offering student loan tax deductions or credits
The number of states offering tax deductions or credits to employers making contributions to their employees’ student loans is on the rise. These state-based tax incentives have the potential to increase employer paydown participation and in turn help more people who are burdened with student loan debt.
Massachusetts introduced a legislative bill that would create a state tax exemption for employers who help their employees pay off student loan debt. In the bill, every dollar that an employer contributes toward an employee’s student loan, up to $2,000 annually, can reduce the employer’s income by that amount.
In an effort to help employers recruit and retain employees, beginning in 2022, Connecticut employers can get a tax credit if they help pay down their employees’ CHESLA Refi CT loans.
Employers should consult with their legal, human resources and tax professionals to understand the specific requirements and benefits applicable to them.
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Student Loan Repayment Assistance (SLRA) is one of the fastest growing employee benefits to help attract and retain top talent. For over 50 years we've simplified the complex by providing expert student loan insight, counseling and tools.
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