You Can Use Your Employee Benefits to Pay Off Your Student Loan.

Student loan repayments will begin to resume soon, and while some borrowers may be able to get relief on monthly bills , for many of them, the burden on budgets will increase. If your workplace provides employee benefits, you may qualify for more than $5,000 in tax-free student loans. Here’s how to take advantage of your employer’s educational assistance program.

How to use your employer’s educational assistance benefits

Educational assistance programs typically provide reimbursement for tuition and fees, as well as books, supplies, and equipment for undergraduate and graduate courses, even if they are not directly related to the employee’s job. Employees can also deduct up to $5,250 in education benefits from their W-2 payroll. (Any benefits received in excess of this amount are subject to taxation.)

Under the expansion of the plan, which began with payments made after March 27, 2020, employees are allowed to use their education aid allowance to cover principal and interest on qualifying student loans. Payments can be made to the employee or directly to the creditor until December 31, 2025.

To be eligible , your loan must be taken to cover educational expenses (such as tuition and fees, room and board, and/or books and supplies) for you, a spouse, or a dependent who is studying at least part-time and cannot enroll from a relative or qualified employer’s plan.

Of course, just because the law allows you to use student loan relief doesn’t mean your employer automatically offers it as an option. Plans for educational assistance programs must be in writing to meet other requirements set by the IRS.

If you are unsure, ask for information about the benefits of your employer’s educational assistance program. Some major employers are already offering student loan refunds, and others are looking to add it to their benefits package , according to data compiled late last year . If your current employer does not offer this benefit, it may be worth negotiating it – you can also apply for it if you plan to change jobs.