Student Loans and the CARES Act

Having a holiday from your student loan payment is sweet, but how we got to that point has been traumatic. It’s difficult to weed through all the news to figure out what is happening on one specific subject. One of the questions we are hearing from borrowers is: Will the  CARES Act affect my employer’s ability to make payments on my student loan?

Here’s the answer:

From 03/27/2020 to 12/31/2020 employers can make contributions to employee student loans (interest or principal payments) that are both income and payroll tax exempt. Traditionally employer payments are taxable employee income. Employer contributions must be made under the Educational Assistance Plan and comply with IRC section 127 that states employees have no cash opt-out option in lieu of student loan assistance.