Employers are stepping up their game in the race to attract and retain top talent amidst today’s competitive job market. One enticing benefit gaining traction? Assistance with student debt repayments.

As the looming end of the federal student loan payment freeze approaches, the relief that millions of borrowers experienced during the pandemic will soon be a thing of the past. This change is reigniting interest not only among those grappling with loans but also among employers aiming to support their workforce.

Back in 2019, student debt repayment programs were a hot topic, but the pandemic caused a shift in priorities for both borrowers and companies. The pause on federal loan payments alleviated immediate pressure, prompting businesses to focus on more urgent aid, like emergency savings and hardship programs.

Now, with the pause coming to an end and businesses striving to attract and retain talent in a bold job market, the tide is turning. The Employee Benefit Research Institute’s 2021 survey revealed that approximately 17 percent of larger companies, boasting 500 or more employees, offered some form of student debt assistance. Among them, nearly a third provided direct loan subsidies, and an additional 40 percent planned to roll out similar programs in the near future.

Expectations are high for an uptick in adoption as we move towards a more normalized work environment, according to experts in the field.

In 2019, the average borrower with remaining education debt owed around $20,000 to $25,000, with monthly payments averaging $200 to $300, as per the Federal Reserve.

A survey by Fidelity Investments highlighted that over a quarter of employers surveyed (29 percent) were already offering contributions toward student debt as a benefit. The impending expiration of the federal loan payment pause is prompting more companies to consider implementing similar programs.

The key driving force behind this surge in interest is a provision in the federal government’s pandemic relief measures. Employers can now offer tax-exempt loan repayment contributions to their employees, up to $5,250 annually until 2025. This means employees won’t face income taxes on this benefit—an attractive perk. Previously, unlike tuition assistance, loan-repayment contributions were taxable.

Companies are jumping on board. McLaren Northern Michigan Hospital recently introduced a student loan aid program, recognizing the need to stand out in a competitive healthcare landscape. This move aims to retain employees, particularly nurses, who have been enticed by lucrative opportunities as travel nurses. The program offers escalating benefits over three years, providing a maximum benefit of $12,000.

Eligibility for repayment benefits can vary between employers. Typically, loans taken out by the employee for their education—both federal and private—are eligible for repayment benefits. However, it’s best to inquire directly with the company about their specific policies and criteria.

In a landscape where talent is the currency, companies are recognizing the weight of student debt and using innovative benefits to attract and retain the best minds in the game.