With more and more college graduates entering the workforce and more and more of them graduating with substantial debt, some churches are enticing prospective employees with a student loan repayment benefit.
Over 70% of college graduates have student loan debt, 76% of respondents to a 2015 American Student Assistance survey said the benefit would be a contributing factor to their accepting a job, and only 4% of churches offered the benefit in 2016.
It has downsides, though. For one, it helps only employees with current student loan debt, not those who’ve already worked hard to pay off their debt or never had any in the first place. The benefit could therefore be viewed as unfair and become a cause of contention in the workplace. For another, it’s considered taxable income.
Churches, however, do have some leeway on how to offer the benefit. The amount of the benefit can be offered monthly or as a lump sum, it can be capped, and it can be tied to an employee match. A waiting period is also fine.
If you’re looking for an enticing benefit to attract new talent, a student loan repayment benefit may be something to consider. If this benefit isn’t desirable or doable, that’s okay. We realize this benefit isn’t one that will work for every church, but we want to keep you up to date on employee benefit trends.
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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