Whether we have seen the end of the Great Resignation or a move to the Great Layoff, employers continue to seek out ways to be an employer of choice.  Employers are always struggling to attract and retain the best employees.  Various tools abound, but for many younger employees the ability to offer ways to address their student loans might give employers one of the better tools to retain those employees over time.  If employers want to provide those options in 2024 they now can thanks to new provisions in the SECURE 2.0 Act—but they need to take action to make it happen.

Student loan debt: Where things stand

The Biden administration just canceled a large portion of student loan debt.  That brings the total forgiveness of student debt by the Biden administration to approximately $136.6 billion according to the Department of Education.  However, the total student loan debt is in the $1.6 trillion range.  So, even with the forgiveness programs announced so far, the vast majority of student loans have not been forgiven.  After the COVID-19 pause ended in October 2023 borrowers who had to restart their loan repayments had to suddenly include those loans in their budgets again with the resulting financial shock.

With that repayment shock hitting, many younger employees, typically those with outstanding student loan balances, wondered what their employers might be doing to assist with those loan repayments.  Traditionally, employers could be expected to take the position that they offered competitive salaries and benefits, but individual financial issues were the responsibility of the individual.  Even if employers had wanted to offer assistance with loan repayments, there was no incentive to do so since the assistance would have been no different than any other taxable income paid to employees and did not offer any meaningful differentiator for the employer.