A few years ago, it seemed like the dream of widespread student debt forgiveness was alive and well. And although the hopes of millions of borrowers across the country have since been dashed, there are moves that employers can make to help workers toiling under the burden of defaulted loans and garnished wages.
Student loan borrowers were able to take advantage of a repayments pause when the COVID pandemic began in 2020, but that expired in September of 2023. That same year, the Supreme Court struck down then-President Biden’s decision to cancel up to $20,000 in debt for qualified borrowers. And in May of 2025, a five-year reprieve for student loan borrowers who were in default on their loans expired. That means that collections are now in play, and the Department of Education can garnish wages, tax refunds, and federal benefits.
“Resuming collections protects taxpayers from shouldering the cost of federal student loans that borrowers willingly undertook to finance their postsecondary education,” the Department of Education (DOE) wrote in a statement late April. “There will not be any mass loan forgiveness.”
This isn’t just a problem for an unlucky few. Around 20.5% of student loan borrowers have a payment that’s past due by 90 days or more, according to a TransUnion analysis. And around 5.3 million defaulted borrowers will get a notice from the Treasury Department that their wages could potentially be garnished, according to a May statement from the DOE.
Workers of all ages have already been struggling for years with student loan repayment. But the latest move from the Trump administration has made the issue even more urgent. There are several different ways that employers can help their workers with student loan repayments, including through retirement benefits, educational assistant programs, and paid time off exchanges. Fortune sat down with benefits experts, who say that while offering these benefits do come with challenges, they can go a long way toward improving employee financial wellbeing.
“Business leaders can’t ignore this financial pressure anymore,” says Jeremy Yonan, VP of total rewards at job site Indeed. “Student loan debt isn’t just a personal challenge, it’s actually a business imperative because the ripple effect comes up in every corner of the workplace.”
Matching student loan contributions to retirement plans
Many workers burdened by student loans face a tough financial tradeoff: either reduce their debt or invest in their future. That means they often miss out on contributing to their retirement plans, and their employer’s valuable contributions.
The Secure 2.0 Act of 2022 aimed to fix that problem. Companies can take the funds they’d use to match employee retirement contributions and instead use them to help them pay off student loans.
“When companies offer a contribution into retirement savings in connection with their student loan payments, they are helping to protect the financial future of those employees who are largely sidelined and sitting out of their primary benefit that they offer, which is the retirement match,” says Laurel Taylor, CEO of Candidly, a financial wellness company.
Financially, this process is easy for employers because the money is essentially repurposed so it doesn’t cost businesses extra to provide the benefit. But few employers are currently taking advantage of it because of the administrative burden. Only 11% of Candidly customers have launched the student loan retirement match in connection with secure 2.0. Benefit, according to Taylor. Goldman Sachs Ayco, an arm of the bank that specializes in workplace financial planning, says that while 31% of their corporate clients offer student loan assistance, only 10% do so through retirement.
As the student loan crisis becomes more dire, however, we might see more businesses offer the benefit to their workforce.
“When employees start to see their wages garnished, it might lead some companies to accelerate adoption on the 401(K) side if participation is high enough,” says Kris Battistoni, VP of compensation and benefits solutions at Goldman Sachs Ayco.
PTO exchanges
Companies that offer employees a certain number of days of paid-time off may want to consider a program that allows workers to exchange their unused time and dedicate those funds towards paying off student loan debt.
The benefit is that it costs the employer itself very little, as they have already budgeted that time into their balance sheet. The drawback is that it can come with administrative burdens, because HR managers have to comply with a variety of state laws around what employees can and can’t do with their PTO. There are, however, a variety of B2B businesses out there tailored to handle services like these.
Businesses should also be aware that critics of these PTO exchanges argue that they incentivize employees to disregard work-life balance, which could lead to additional stress and burnout. The program also won’t work for companies with flexible or unlimited PTO.
“The PTO model is interesting, because the biggest criticism that we’ve seen and heard and had had conversations with employers about is it sort of diminishes quality of life,” Stacey MacPhetres, senior director of education finance for EdAssist by Bright Horizons, which helps employers manage education benefits, tells Fortune.
Provide financial planning counseling
One of the easiest and most impactful ways to provide help to people with student loans is offering them financial counseling services.
Student loan borrowers often have more than one loan in play at a time, with different interest rates and timelines. That can make it hard to figure out exactly how much of one’s paycheck should be allocated toward paying off the debt, and which loans should be prioritized, says MacPhetres.
“It’s incredibly beneficial to offer, not just the monetary contribution, but expert coaching behind the scenes to make sure that those funds are being applied in the most expedient way, based on what the employee wants to accomplish,” she says.
Student loan education is just as important as the ability to pay off the debt, experts say, especially if planners can help employees refinance their loans to get a better interest rate. That kind of personalized assistance can not only help with student loans, but also ease worker anxiety around their finances.
“From recent grads and mid-career professionals to parents helping get through college, having that personalized care for different life stages can provide real short term relief,” says Yonan. “It’s not just about the case investment, it’s also about education.”
Educational assistance programs
Employers have long been able to help workers fund their education through educational assistance programs. Businesses are allowed to contribute $5,250 per employee per year towards tuition, books, or supplies, or courses. But in 2020, the program was expanded to include the ability for companies to put this money towards paying off student loan debt, according to the IRS.
Many employers have questions about how they can make sure the money is being used as intended. That’s because employees mostly self-certify that they’ve spent the money on loans, and businesses need to find an efficient way to verify that without invading privacy in the process, says Jonathan Barber, VP head of compensation and benefits solutions, at Goldman Sachs Ayco.
“I think companies thus far are uncomfortable with it because they want to verify that they’re actually doing something to pay off the debt and not just giving employees funds.”
Under current law, the program is set to expire at the end of 2025, according to the IRS. But experts that Fortune spoke with are confident that the program will be made permanent through legislation later this year.
