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Stimulus package allows employers to help with student loans

Posted at 6:56 AM, Jan 06, 2021

NATIONAL (KTNV) — People struggling to pay off college debt could get some support from their employer.

Businesses are getting an extra incentive to help people out with their student loans.

The latest stimulus package extends a tax benefit for companies offering this assistance.

MORE HELP: Companies offering help during coronavirus pandemic

Employers are allowed to make tax-free contributions up to $5,250 a year toward their employees' student loans.

The benefit is set to go until the end of 2025.

But one student loan expert tells us he expects it could eventually become permanent.

"The benefit of making it permanent is there are some employers who are still sitting on the fence with regard to offering this benefit, because they don't want to offer the benefit and then have to stop offering it if congress doesn't extend it." says Mark Kantrowitz

Federal student loan payments are currently paused through the end of the month.

But employers can still make the contribution and it will go entirely to your principal on the loan.