As an employer, you’re always looking for benefits that are not just trendy, but have lasting power to attract and retain top talent. Student Loan Assistance is one of those benefits. But with the provision for tax-free contributions currently set to expire on December 31, 2025, you might be wondering about its future.
Let us put your mind at ease: All signs point to a bright and stable future for employer-provided Student Loan Repayment. Employers should feel confident offering this benefit for the long haul.
A Benefit Proven to Work, With or Without Tax-Incentives
Let’s start with a foundational truth: Student Loan Assistance has always been a powerful tool. When Peanut Butter was founded back in 2015, we saw firsthand how companies offering this benefit gained a significant edge in recruitment and retention. This was years before the CARES Act introduced any tax advantages.
Even today, some companies choose to offer Student Loan Assistance on a taxable basis simply because the return on investment—in terms of talent acquisition, loyalty, and employee gratitude—is so high. The tax-free status introduced in 2020 was simply an accelerant, making a great benefit even more impactful for both employers and their teams.
Legislative Momentum Signals a Tax-free Plans Have a Permanent Place in the Toolbox
The temporary tax-free status was a game-changer, and the good news is that momentum in Washington strongly favors making it permanent.
Recently, the U.S. House of Representatives passed a bill (see section 110113 of HR 1 One Big Beautiful Bill) that would not only make the $5,250 annual contribution permanently tax-free but would also index it to inflation to ensure its value over time.
While this specific bill still needs to move through the Senate, it is the strongest signal yet of broad, bipartisan agreement on this issue. Making this benefit permanent is a popular idea with widespread support. This means that whether through this bill or another, the likelihood of this provision continuing beyond 2025 is extremely high. The legislative direction is clear.
Your Strategy: Move Forward with Certainty
So, what does this mean for your organization?
It means you can and should move forward with confidence. The underlying value of Student Loan Assistance is undisputed, and the legislative environment is overwhelmingly positive. Companies that act now are positioning themselves to win the best talent in a competitive market.
Remember, the most popular plan today offers full-time employees the opportunity to receive a $50/month contribution to their qualified student loan. Your company’s program can be launched today with Peanut Butter in under an hour.
Whether you’re looking to implement a program for the first time or reaffirm your commitment to an existing one, you can be assured that Student Loan Assistance is a durable, high-impact addition to your benefits arsenal. It’s a win for your employees, a win for your business, and it’s here to stay.