Bloomberg BNA (Bureau of National Affairs, Inc.) is reporting that an Internal Revenue Service decision allowing an employer to offer a student loan repayment benefit as an element of its retirement plan could open the door to other employers interested in offering similar benefits.
The article focuses on a private letter ruling made by the IRS to an unnamed employer seeking clarification regarding its plan to tie 401(k) contributions to student loan repayment contributions.
The IRS gave the go-ahead to that employer on Aug. 17, 2018, noting, “This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) provides that it may not be used or cited as precedent.”
But while not precedential, the Bloomberg report said, the private letter ruling is likely to quell concerns from employers interested in offering a student loan benefit through their 401(k) programs, but who are worried about complying with the law.
Bloomberg cites a 2017 American Student Assistance survey of 500 people between the ages of 22 and 33 that found 86 percent of young workers would stay with their employer for five years if they helped pay off their student loans.
To date, a handful of companies have adopted a student loan repayment program.
To read the full Bloomberg BNA article, click here.