The Trump administration has begun garnishing wages of student loan borrowers in default. These are the benefits businesses can offer employees to help with their debt

Workplace Culture·Worker benefitsThe Trump administration has begun garnishing wages of student loan borrowers in default

These are the benefits es can offer employees to help with their debtBY Brit MorseBY Brit MorseLeadership ReporterBrit MorseLeadership ReporterBrit Morse is a Leadership reporter at Fortune, covering workplace trends and the C-suite

She also writes CHRO Daily, Fortune’s flagship for HR fessionals and corporate leaders

SEE FULL BIOA worried student loan borrower checking their debt balance

MementoJpeg—Getty ImagesA few years ago, it seemed the dream of widespread student debt forgiveness was a and well

That means that collections are now in play, and the Department of Education can garnish wages, tax refunds, and federal benefits. “Resuming collections tects 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 blem for an unlucky few. 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 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 grams, 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 imving employee financial wellbeing. “ 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 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

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 tect 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 cess is easy for employers because the money is essentially repurposed so it doesn’t cost es extra to vide the benefit

But few employers are currently taking advantage of it because of the administrative burden

Benefit, according to Taylor

PTO exchanges Companies that offer employees a certain number of days of paid-time off may want to consider a gram 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 es out there tailored to handle services these

Es 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 gram 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 is it 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

Vide financial planning counseling One of the easiest and most impactful ways to vide 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 fessionals to parents helping get through college, having that personalized care for different life stages can vide real short term relief,” says Yonan. “It’s not just the case investment, it’s also education. ” Educational assistance grams Employers have long been able to help workers fund their education through educational assistance grams

But in 2020, the gram 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 how they can make sure the money is being used as int

That’s because employees mostly self-certify that they’ve spent the money on loans, and es need to find an efficient way to verify that without invading privacy in the cess, 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 gram is set to expire at the end of 2025, according to the IRS

But experts that Fortune spoke with are confident that the gram will be made permanent through legislation later this year

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