Consumer Alert: Employers are helping pay off employees’ student loans.  And it’s tax-free!

ROCHESTER, N.Y. (WHEC) — As students return to college campuses across the Rochester area, we’ve been focusing on college, cash, and building credit.

Now I’m tackling student loans. On Tuesday 208.000 former ITT Technical Institute students got some good news.  The government is wiping away 3.9 billion dollars of federal student loan debt.  The federal government first started investigating ITT in 2004 after a whistleblower revealed the school lied to students about the quality of its programs, job placement rates and even accreditation. It took 12 years for the government to finally refuse to support the corrupt college with federal student loan money.  But by then, students had spent billions for degrees that weren’t worth the paper they were written on.  ITT was once one of the largest for-profit schools in the country with 130 campuses in 38 states including three here in New York.  They were in Liverpool, Albany and Erie County.  But with this latest move by the Biden administration, 208,000 former students are now debt free.

This is the third such action the president has taken to provide relief for students who attended for-profit schools the government deems corrupt.  As for student loan relief for everyone else, no word on that.  According to the Federal Reserve, the average student loan debt is more than $32,000.  But did you know that a growing number of employers are helping students pay that debt?

When Congress passed the CARES Act in 2020, one really cool provision got very little attention.  Employers can pay up to $5,250 toward their employees’ student debt.  And it’s tax free.  That means employers don’t have to pay payroll taxes on it, and you don’t have to pay income taxes on it. I talked to one of the leaders at Sharp Notions, a software development company in Fairport, about why he started helping his employees help with their student loans

“We had an employee talk about her upcoming wedding and that she was not going to postpone it any longer due to student debt,” Jeff Burke, Principal at Sharp Notions explained.  “And another one said they had student debt and they wouldn’t be able to live in the town they always wanted, and a third person said they had student debt.  And I talked to our partners and we decided that this would be a good thing for us to develop and offer as a benefit to our employees.”

Then they went a step further.  They formed a company called Paidly, also in Fairport.  It creates software for businesses that want to help their employees pay off their student loan debt.  He says it’s a perfect marriage between public and private innovation to help solve a very big problem.

So if you’re looking for a job, check the job postings for SLRA.  That stands for Student Loan Repayment Assistance.  And if you already have a job, ask your employer to add the benefit.  Think about it.   You could be getting $437.50 every month to help pay off your loans, tax free.