| Q. What are the tax implications for the employee?

| A.

Recent Federal stimulus legislation included a provision that extends an employer’s ability to provide a student loan repayment benefit to employees on a tax-free basis before January 1, 2026. Under this provision, an employer may contribute a combined total of $5,250 annually toward an employee’s student loans, and/or education expenses (e.g., tuition, fees, books). Such payment would be excluded from the employee’s income. The provision applies to any student loan payments made by an employer on behalf of an employee before January 1, 2026.

| Q. What type of reporting is required to the IRS for this benefit?

| A.

Due to the tax provision provided in the Corona Aid, Relieve and Economy Security Act effective March 27, 2020 and then extended by the Consolidated Appropriations Act of 2021 enacted December 27, 2020, contributions made before January 1, 2026 are not considered income for the employee, but may be deductible for the employer.

Employer payments towards an employee’s student loans would not be subject to state income taxes at this time. Individual state regulations may be subject to change.


| Q. Is there a minimum participation requirement for this service?

| A.

RISLA does not require a minimum participation number, however there is a nominal minimum fee per contribution per company or organization. As a non-profit organization, RISLA uses this fee is to cover the operating costs of the program.

| Q. What resources will be required from our Human Resources or Payroll Departments?

| A.

The program is designed for easy management and upkeep for HR staff, with little involvement necessary after initial set up. An admin portal will be provided for all management, tracking, and reporting purposes needed by members of your HR and/or payroll team. The first step for  your admin is to determine and upload eligible employees along with their contribution scheduling. After implementation, ongoing monitoring of the program is minimal, only minor maintenance, such as adjustments to enrollments as necessary.  A RISLA Client Support Representative will be available to provide support for any technical or procedural questions throughout the onboarding process for both employees and employers.


| Q. What is the implementation schedule and process to begin offering this program?

| A.

Implementation for this service takes approximately 3-4 weeks. This process begins with an Implementation Kick Off call with your Human Resources and/or Payroll administrators and the RISLA Client Support Representative, in which we will outline all deliverables and timelines.

Deliverables include:

  • Defining which employees will be eligible
  • Defining how much student loan employee assistance will be provided 
  • Defining primary company contacts and administrative users
  • Building and branding of your customized admin and employee portal
  • Reviewing and approval of the communication plan and materials to inform employees of this great new benefit
  • Training on the admin portal
  • Providing your Go-Live date

| Q. How will employees track payments?

| A.

Employees will have secure access via login to your company branded portal showing all payment transactions made by you on their behalf. Additionally, employees will receive monthly payment confirmation notifications keeping them up to date on the progress being made by you to reduce their student loan debt.


| Q. What is the process for approving or removing an employee?

| A.

At any time during the month before the scheduled disbursement is made, your HR or Payroll designee will be notified of new employees that have signed up to participate in the program. If you determine they are eligible, just click the “Approve” box.

Previously approved employees can be deactivated by clicking the “Remove” button next to their name.

Additional assistance can be provided by Client Support Representative if needed.

| Q. What is the industry standard contribution?

| A.

As this financial wellness benefit is being offered by an increasing number of employers, there are various approaches and amounts for assistance. Contributions have been noted to start as low as $50 per month and up to $200 per month. Flexible contribution scheduling is possible as well as one-time and quarterly options being common. Companies also take varied approaches to the limits of the benefit, as some utilize a time frame limit (between 2 and 5 years) while others utilize a dollar amount limit per employee. Lastly, there can be a variation of eligibility, beginning as early as the hire date or a minimum time of service before becoming eligible for the benefit (such as after a minimum of six months of employment). But whatever approach you would like to take, we can implement for you.

For more information on Employer Student Loan Repayment programs used at other companies, below are some recently published articles:

  • Companies That Offer Employer Student Loan Repayment (NerdWallet, 11/13/2019)
  • 5 Reasons to Offer a Student Loan Repayment in 2019 (Benefitnews, 2019)
  • Which Employers Offer Student Loan Repayment (US News, 07/01/2019)

| Q. Are there any alternative programs to help with student debt if employer contributions towards  student loan repayment is currently not part of our employee benefit package?  What are the tax implications for the employee?

| A.

Yes! If employer contribution for student loan repayment is not currently in your benefits expense budget, RISLA would be happy to partner with you. RISLA offers exclusive refinancing benefits for employees at participating employers through our student loan refinance program.

Refinancing can reduce their current interest rates, change the repayment term, streamline and clarify monthly repayments, and/or reduce their monthly payments.

For companies headquartered in Connecticut, our strategic partnership with Connecticut Higher Education Supplemental Loan Authority (CHESLA) will provide access to their refinance and financial literacy programs.

| Q. How can our organization get started?

| A.

Request a demo or consultation. We will reach out to you to schedule an onsite meeting or conference call to answer any additional questions or concerns you may have.

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