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Troy, MI – March 27, 2020 — Edcor, a national provider of education benefits administration solutions that processed just under $250M in tuition assistance payments and supported more than 2M employees in 2019, is applauding the inclusion of a maximum $5,250 tax credit included in the Coronavirus Aid, Relief and Economic Security (CARES) Act for employers who offer student loan repayment assistance to aid in the economy’s recovery following COVID-19.
“With an estimated $1.52 trillion U.S. student debt load, employers have been interested in helping their employees ease the burden of student debt, but the lack of tax credits has been a barrier to implementing such programs,” Edcor CEO Adrienne Way said. “For more than a year, long before we were experiencing a pandemic, employers have been waiting to see what happens with legislation on student loan repayment plans and tax credits. The CARES Act addresses this, with a tax credit for employers and the opportunity for employees to receive the benefit tax free. While it’s through December 31, 2020 now, we believe it is likely to become permanent.”
Edcor introduced its Freedom student loan assistance program in 2019 and is one of only two full-service education benefit administration companies nationally offering such a program. Other student loan repayment platforms in the marketplace are software programs focused solely on loan repayment, rather than full-service education solutions like Edcor’s that are designed in collaboration with employers and education partners specifically to recruit and retain key personnel.
Student loan repayment programs can be implemented quickly, regardless of employer size, and are effective for recruiting and retaining talent, according to Way.
“The student loan repayment tax credit within the CARES Act is great news for all size employers because you don’t have to be a large, sophisticated employer to establish and offer a student loan repayment program benefit,” Way said. “As a matter of fact, such programs allow smaller employers to compete for the top talent that often goes to larger organizations with more lucrative benefits.”
Way further explained why the new law is a win for employers and employees.
“This benefit means more than just paying off student loans; assistance from the employer helps employees free up income to put into a 401(k) or save money for large purchases such as a new home – which is good for the economy,” Way said.
Student loan repayment programs, along with traditional tuition assistance, are also long-term strategic initiatives that help employers develop a more diverse workforce by creating new opportunities for women and minorities. Earlier this year, Edcor released a white paper, Student Loan Repayment Assistance Raises Diversity and Inclusion, addressing the topic.
Edcor, a certified woman-owned business, is the benchmark in education benefits administration. For more than 38 years, our customized service and software solutions have allowed clients to use education benefits programs, including tuition assistance and student loan assistance, for employee recruiting, retention and development. Additional information can be found at https://www.edcor.com/.