“My Employer Is Helping with My Student Loans—Should I Still Pay Extra?”

If you work for a non-profit hospital, school, or community organization, chances are you’ve spent years balancing the desire to pay down student debt faster with the reality of everyday expenses. Now that your employer offers student loan repayment assistance, you might be wondering:

Should I still make extra payments—or let the benefit do the work?

Let’s break down how employer contributions affect your loan payoff strategy, and whether accelerating payments, refinancing, or reallocating funds makes the most sense for you.

Understanding How Employer Student Loan Repayment Works

Employer contributions—often called Student Loan Repayment Assistance (SLRA)—mean your organization is paying a set amount directly toward your student loan balance each month, usually between $100 and $200. These payments go straight to the principal, helping reduce your balance faster and saving you interest over time.

Even better: under current IRS rules, up to $5,250 per year in employer contributions can be tax-free through 2025.

That’s like getting free money applied directly to your debt. But does that mean you should stop paying extra yourself?

When Paying Extra Still Makes Sense

If your employer is helping with your student loans, continuing to pay extra can help you hit financial milestones faster—especially if your goal is to be debt-free sooner rather than maximizing forgiveness.

Here’s when paying extra may make sense:

• You’re not pursuing Public Service Loan Forgiveness (PSLF).
• Your total loan balance is moderate, and you can comfortably afford to add to your employer’s contribution.
• Your interest rates are high, and you want to minimize total interest paid.

The last two points are especially important if you have private loans. In this case, you can think of your employer’s payments as an automatic boost—accelerating your payoff timeline while reducing your own financial burden.

When You Might Pause Extra Payments

If you’re a non-profit worker pursuing PSLF, it’s often better to avoid paying extra.
Here’s why: only your qualifying monthly payments count toward forgiveness—not how much you pay.

So, adding extra money won’t get you forgiven any sooner—it’ll just reduce what’s eventually wiped away. Instead, focus on:

• Staying enrolled in an income-driven repayment plan (like SAVE or IBR)
• Ensuring all payments and employment certifications are up to date
• Letting your employer’s contributions handle some of the load

That extra cash could be redirected toward emergency savings, retirement, or other financial goals while still working toward full loan forgiveness.

Refinancing: Proceed with Caution

It can be tempting to refinance your federal loans to lower your interest rate—but for non-profit and public service workers, refinancing often means losing access to PSLF and income-driven repayment protections.

Unless you’re 100% certain you won’t need those programs, it’s usually smarter to avoid refinancing.

Instead, maximize your employer’s benefit while keeping the flexibility of federal protections—especially during uncertain financial times.

How to Reallocate Your Own Funds Wisely

If your employer is paying $150 a month toward your loans, think of it as an opportunity to reinvest your own $150 elsewhere—without losing progress.

Here are smart moves for that extra money:

• Build or replenish an emergency savings fund
• Contribute more to your retirement account
• Save for a down payment or child’s education
• Pay down high-interest credit card debt

The key is to make your money work harder for you, not just your lender.

Finding the Best Path Forward

Employer contributions can be a game-changer in your student loan journey—but your next move depends on your goals.

If you’re aiming for forgiveness, stay strategic and keep your payments minimal.
If you’re aiming for freedom, combine your employer’s help with your own contributions to crush your balance faster.