In 2025, student loan debt remains a major obstacle to financial wellness for millions of American workers. While education is often viewed as the gateway to opportunity, the rising costs of higher education have left many employees burdened by debt throughout their careers.
With ongoing legislative changes, program delays, and economic uncertainty, navigating the student debt landscape has become increasingly complex. For HR professionals, this presents both a challenge and opportunity —- the challenge of creating benefits to address employee concerns about student debt, along with the opportunity to build a more engaged, loyal, and financially resilient workforce.
Here’s a look at the latest developments in student lending — and how HR can play a role in supporting and empowering employees burdened by education debt.
Key Points
• Student loan debt significantly hinders financial wellness, impacting millions of American workers.
• Collection activities on defaulted loans have resumed, affecting over five million borrowers.
• Legal uncertainty surrounds repayment plans such as SAVE, PAYE, and ICR.
• Employers can offer direct student loan repayment assistance and 401(k) matching to improve employee financial health.
• Financial education and counseling services help employees understand and manage repayment options effectively.
Key Challenges Employees May Be Facing
Despite federal efforts to ease the burden of student loans, 2025 has ushered in a new set of uncertainties. Here are some of the most recent changes in federal loan repayment that may be impacting the financial health of your employees.
Resumption of Collection Activities
The Department of Education (ED) resumed collections on defaulted students on May 5, 2025, after a roughly five-year hiatus. The action affects over five million borrowers who are now in default, with an additional four million in late-stage delinquency. Consequently, nearly 10 million borrowers could soon be in default, representing almost 25% of the entire federal student loan portfolio.
The ED has restarted collections through the Treasury Offset Program (TOP), which allows for the offset of income tax refunds and certain federal and state payments. If borrowers continue to miss payments going into the summer, Federal Student Aid will place them in administrative wage garnishment. This means up to 15% of their disposable income can be withheld from their paycheck and sent to their loan holder.
Legal Uncertainty Surrounding Repayment Plans
The Saving on a Valuable Education (SAVE) plan, designed to lower monthly payments and eventually forgive remaining balances, is currently on ice due to a court ruling that blocks its implementation. The roughly eight million borrowers who signed up for SAVE are now in an interest-free forbearance, and the future of the plan remains uncertain. The same court ruling also paused the forgiveness feature of the Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR) Plans.
A final resolution on these programs may come from the Supreme Court or through Congressional action.
Potential Changes to PSLF
The Public Service Loan Forgiveness (PSLF) program, which promises debt forgiveness for nonprofit and government workers after 120 qualifying payments, is facing renewed scrutiny. An executive order signed by President Trump seeks to limit which employees can qualify for loan forgiveness by changing what counts as public service. If these changes are implemented, some nonprofit organizations could lose their eligibility for the PSLF program.
Supporting Employees With Student Debt
HR departments have a unique opportunity to support employees in their financial journeys. While traditional benefits such as health insurance and retirement savings remain important, today’s workforce increasingly values financial wellness programs that address immediate concerns — chief among them, student loan debt.
Helping employees navigate their student debt repayment journey can lead to meaningful organizational benefits, including:
1. Reduced Financial Stress
According to SoFi at Work’s Workplace Financial Well-Being 2024 survey, employees spend nearly 14 hours a week stressing about finances, over half that time (8.2 hours) during working hours. Perhaps not surprisingly, one in three employees say financial issues impact their ability to focus at work, and nearly 25% say the stress reduces their productivity and confidence on the job.
Employer efforts to alleviate financial stress can lead to increased productivity, reduced absences, and improved overall employee well-being. When workers aren’t preoccupied with looming payments or default risks, they can bring more focus and energy to their roles.
Improve Loyalty and Retention
By actively addressing the student debt crisis and offering support, company leaders can foster a culture of support and empathy within the organization. This can create a positive work environment where employees feel valued and supported in their financial journey. Those employees may feel less inclined to look for a different employer, increasing your organization’s retention rates.
Employees may also be more engaged and connected to their work when they feel their employer takes their financial wellness seriously.
Increased Financial Literacy
HR can also play an educational role, helping to demystify the often-confusing world of student loans. By providing clear, accurate information — through webinars, one-on-one counseling, or curated resources — benefits teams can empower employees to make informed decisions about repayment strategies, consolidation, and forgiveness options.
That can be especially valuable for borrowers with loans in default. For example, if they’re considering enrollment in an income-driven repayment (IDR) plan, you may provide access to a student debt consultant who can help them compare the various options and choose a workable repayment plan.
Key Benefits to Consider
As HR teams explore ways to support employees with student debt, a variety of benefit options are emerging as both impactful and feasible.
Direct Student Loan Repayment Assistance
One of the most straightforward ways to assist employees is by contributing directly to their student loan payments. Under current law, employers can offer up to $5,250 annually in tax-free student loan repayment assistance through 2025. This benefit can be structured as a monthly subsidy, annual lump sum, or performance-based incentive.
Direct repayment support not only helps employees chip away at principal faster but also signals a strong commitment from employers. When paired with financial counseling or other resources, this benefit can have a highly positive impact on employee morale and financial health.
401(k) Student Loan Match
An innovative employer benefit gaining traction is matching employees’ student loan payments with contributions to their retirement accounts. Thanks to changes under the SECURE 2.0 Act that went into effect in 2024, employers can make 401(k) matching contributions based on employees’ qualified student loan payments.
This addresses the common dilemma many young workers face: choosing between paying off debt and saving for retirement. By offering both, employers can help workers build long-term financial security without sacrificing immediate obligations. It’s a win-win that encourages both debt reduction and future planning.
Recommended: Why Financial Wellness Is Important in the Workplace
Financial Education and Counseling Services
In addition to monetary support, HR can offer programs that build financial literacy and empower smarter decision-making. Partnering with financial wellness platforms or nonprofit organizations, employers can provide workshops, online tools, and access to certified counselors.
These resources can help employees:
• Understand repayment options (e.g., income-driven repayment, refinancing, consolidation)
• Navigate forgiveness programs (e.g., PSLF and forgiveness through IDR plans)
• Avoid default and wage garnishment
• Strategize for long-term financial goals alongside debt repayment
The Takeaway
As we navigate the evolving landscape of student debt in 2025, one truth is clear: employers have a powerful role to play in supporting the financial wellness of their teams. For employees burdened by uncertainty, resuming payments, and potential wage garnishments, HR support can be the difference between ongoing stress and a path to stability.
By offering thoughtful benefits — ranging from financial education to direct loan repayment and retirement matching — company leaders can foster a workplace where employees feel valued and supported.
SoFi can help. We’re experts in the student lending space. SoFi at Work offers student loan information, refinancing, and repayment platforms, along with a range of other benefits tools that can help you build a successful and loyal workforce.
Photo credit: iStock/filadendron
Products available from SoFi on the Dashboard may vary depending on your employer preferences.
Advisory tools and services are offered through SoFi Wealth LLC, an SEC-registered investment adviser. 234 1st Street San Francisco, CA 94105.
SoFi Student Loan Refinance Loans, Personal Loans, Private Student Loans, and Mortgage Loans are originated through SoFi Bank, N.A., NMLS #696891 (Member FDIC), (www.nmlsconsumeraccess.org ). The 529 Savings and Selection Tool is provided by SoFi Wealth LLC, an SEC-registered investment adviser. For additional product-specific legal and licensing information, see SoFi.com/legal. 2750 E. Cottonwood Parkway #300 Cottonwood Heights, UT 84121. ©2025 Social Finance, LLC. All rights reserved. Information as of November 2025 and is subject to change.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
SOAW-Q225-011