The CARES Act, which was signed into law by President Trump, has various provisions to support the organizations, workers, and families in America. The Coronavirus demanded immediate relief for the people of America. Under this Act, there is a provision where the employers can help their employees with their student loans of up to $5,250, tax-free. This is an attempt by the government to ease the financial burden created by the pandemic.
This provision is made until the end of this year. Before this Act, academic debt payments were as wages, but since there is already a load of crisis, they have been excluded from taxes on income and payroll, until the last day of this year. This will benefit both- the employee as well as the employer.
Companies offer loan repayment assistance to attract educated talent from the pool. Employees having education loans are highly impacted by the debt. Companies offering these benefits is an effort by them to retain these employees.
The novel coronavirus has put a strain on companies as well as professionals. This relief measure will mean expecting the number of companies that offer student debt assistance to go up dramatically. With so many industries and companies trying to stay afloat, and so many professionals and employees trying to stay relevant and survive in the market, this provision is a sigh of relief. There will be an acceleration in the adoption of a loan repayment assistance program by several companies in the second half of the year.
Even though this is only temporary, people are hoping that this paradigm shift in the policies will be adopted permanently after 31st December 2020. Some are even confident about it.
Will this incentive stay after the pandemic leaves? Stay tuned to hrtech cube to know about it in the future. Hrtech cube publishes content in various forms from the industry of hrtech on its site regularly.