How does employer student loan repayment assistance work?

Employers contribute directly toward an employee's student loan balance, either through tax-free payments under IRS Section 127 or through the 401(k) match provision introduced by SECURE Act 2.0.

How much can employers contribute tax-free to student loan repayment?

Employers can contribute up to $5,250 per employee per year tax-free, the same annual limit that applies to tuition assistance under IRS Section 127. Starting in 2026, this amount adjusts annually for inflation.

Can student loan repayment assistance be combined with a 401(k) match?

Yes. Under SECURE Act 2.0, employers can treat an employee's qualifying student loan payments as elective deferrals for purposes of matching those payments in the employee's 401(k) plan.

Are Parent PLUS loans eligible for tax-free employer contributions?

No. Direct Parent PLUS loans do not qualify for tax-free employer payments under IRS Section 127. Section 127 educational assistance programs only apply to qualified education loans incurred for the employee's own education and the employee's own debt, not for a dependent child's borrowing.

Student Loan Repayment Assistance for Employees

SLRA

Help Employees Crush Their Debt - While Boosting Retention and ROI

At PeopleJoy, we make it easy for employers to offer Student Loan Repayment Assistance (SLRA), whether through tax-free contributions under IRS Section 127 or the new 401(k) match provision from Secure ACT 2.0. Our platform handles everything from compliance to communications so you can focus on results.

Why Should Employers Offer Student Loan Repayment Benefits?

Attract and Retain Talent

Differentiate your benefits in today’s competitive market—especially for Millennial and Gen Z employees. 80% of employees say they’d stay longer if their employer helped with student loans.

Offer a Tax-Free Benefit

Contribute up to $5,250 per year, per employee, tax-free—just like tuition reimbursement. Starting in 2026, this amount will adjust annually for inflation, keeping your benefits competitive.

Drive Financial Wellness & Engagement

Reduce employee stress, improve productivity, and show your commitment to long-term financial well-being.

What We Offer?

Turnkey Student Loan Repayment Assistance (SLRA)

Reduce employee stress, improve productivity, and show your commitment to long-term financial well-being.

IRS Section 127-compliant

Automated contribution processing

Optional 1:1 employee coaching

Works standalone or bundled with tuition reimbursement

Already offer Tuition Reimbursement Benefits?

Bundle SLRA for a full-spectrum education benefit with zero added complexity.

Book a Demo

SECURE Act 2.0: 401(k) Matching for Student Loan Payments

As of 2024, employers can match student loan payments as if they were retirement contributions—a game changer for financial equity and retention.

Integrate matching into your current 401(k) plan

Stay compliant with IRS/DOL rules

Coordinate with plan administrators

Track loan payments & trigger match contributions automatically

Why Do Employers Choose PeopleJoy?

We're not just software, we’re your strategic partner for delivering impactful education benefits. With PeopleJoy, you get:

White-glove onboarding for HR and employees

Engagement-driven communications

Advisor access for complex loan scenarios

Ongoing report and ROI insights

Real Impact

“We’ve seen measurable improvements in retention among employees receiving student loan assistance. It’s one of the most valued benefits we offer.”

— CHRO, National Healthcare System