Student loan repayment and taxes

[Perrotfish]

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Does anyone know if there's a tax advantage to having an employer structure part of your pay as 'student loan repayment'? I know there's not much of a deduction if I pay them off myself (none, actually). If my employer is going to pay me a set salary either way, and I know that most of the salary is going towards student loans, do I get to keep more of my paycheck my employer agrees to call the salary student loan repayment and pays it to my lender directly? Or is all subjected to the same taxes either way?

 

[sweetlenovo88]

No incentive, it is still ordinary income and is in no way deductible.

 

[RangerBob]

As of right now anything your employer pays towards your loans is considered taxable income. I believe even anything the military pays you is taxable (I'm referring here to their loan repayment programs--most students sign up for the programs that pay their tuition, which is different)

There was a recent article a while back (NYT maybe?) about how the gov't was considering a bill allowing businesses to pay X dollars towards their employees' student loans, tax-free. I haven't heard any follow-up on that since.

 

[Redtwogreen]

Does anyone know if there's a tax advantage to having an employer structure part of your pay as 'student loan repayment'? I know there's not much of a deduction if I pay them off myself (none, actually). If my employer is going to pay me a set salary either way, and I know that most of the salary is going towards student loans, do I get to keep more of my paycheck my employer agrees to call the salary student loan repayment and pays it to my lender directly? Or is all subjected to the same taxes either way?

A lot of this is hopefully changing right now. There are a few proposed bills that if passed, would make the tax treatment of employer student loan repayment similar to that of a 401(k).

 

[Plastikos]

A lot of this is hopefully changing right now. There are a few proposed bills that if passed, would make the tax treatment of employer student loan repayment similar to that of a 401(k).

Its still unnecessarily tortured and makes it incumbent upon the employed to get lucky with a job that happens to have this benefit structure, so it wont really get utilized or do what it supposed to, unless of course thats really the plan. Make a good looking effort that in no way will really make a dent. Its overly complex this way, like every other bill for student loans.

It should be wholly removed from the employer and done at the individual taxpayer level. Simply make every single dollar paid towards student loans 100% tax deductible with zero restrictions. Very simple, effective and self limiting.

 

[Redtwogreen]

Its still unnecessarily tortured and makes it incumbent upon the employed to get lucky with a job that happens to have this benefit structure, so it wont really get utilized or do what it supposed to, unless of course thats really the plan. Make a good looking effort that in no way will really make a dent. Its overly complex this way, like every other bill for student loans.

It should be wholly removed from the employer and done at the individual taxpayer level. Simply make every single dollar paid towards student loans 100% tax deductible with zero restrictions. Very simple, effective and self limiting.

Lets get you in Congress.