- A Bureau of Labor Statistics report found that 4% of employers offer student loan repayment.
- Workers who earn more were more likely to have access to the Student Loan Relief Benefit.
- Meanwhile, the Biden administration is reportedly considering canceling $10,000 of debt for borrowers.
Americans are sitting on $1.7 trillion in student debt, and only a small fraction are getting help from their employers.
According to a new analysis of Bureau of Labor Statistics. People working in management, professional and related fields were the most likely to have their employer contribute to their loans – 7% of workers in this category had access to the student loan repayment benefit.
Perhaps most striking, however, is which income brackets had the most access to student loan repayment benefits. Among the poorest 10% of workers, only 2% had access to student loan repayment benefits. Meanwhile, 9% of the top 10% earners had access to a student loan repayment benefit, more than four times higher than the lowest earners.
This is because the percentage of workers with access to a student loan repayment benefit increases as you move up the income spectrum. In simpler terms, the more money you earn, the more likely you are to qualify for a student loan repayment benefit.
For example, among the 25% of the lowest paid employees, only 2% had access to it. Meanwhile, 8% of the top 25% earners had access to a reimbursement benefit.
Employers offering student loan repayment is not a new, albeit uncommon, phenomenon. A SHRM investigation found that 8% of companies offered student loan repayments in 2020, and 1% of respondents said their employers had actually reduced this benefit.
As Leo Aquino of Insider reports, the CARES Act expanded the amount of relief employers can give their workers. Under the early pandemic legislation, employers can make $5,250 annually in tax-free student loan payments for their workers.
While lower-income workers tend to hold less average student debt — and hold a lower percentage of debt — those earning less than $40,000 make up three-quarters of student borrowers. Black borrowers also have a disproportionately higher average balance of student loan debt. The left-leaning Roosevelt Institute found that canceling $50,000 of debt per borrower would help low-income borrowers more, contradicting the message that this amount of relief would primarily benefit high-income people with a burden. large loan.
Meanwhile, the Biden administration is reportedly preparing to write off $10,000 in student loans for borrowers who earn less than $150,000. Some Democrats and advocates said that was not enough.
“$10,000 relieves most people who owe the least,” Rep. Alexandria Ocasio-Cortez said. wrote on Twitter. “What relief is there for the most desperate? For them, the interest will quickly cancel out that 10,000. We can do better.”