Student loan holders are facing unprecedented financial challenges in tackling their debt. For the first time in five years, federal student loan borrowers must pay their student loans or face financially crippling consequences. Nearly half of all borrowers, around 20 million, have not yet made a payment or have already fallen behind. Borrowers not in good standing by the end of the year will incur thousands of dollars annually in unnecessary penalties through negative credit, wage garnishment and collection fees.

Further increasing the stakes for borrowers, Congress passed and the president signed, the One Big Beautiful Bill Act, initiating sweeping changes to the federal student loan program that will increase student loan payments by an estimated $300 billion.

For borrowers, the law dramatically reduces access to current Income-Driven Repayment (IDR) options that help borrowers afford their monthly payments based on their income, replacing them with less generous plans that lengthen repayment timelines and increase monthly costs. Many borrower-friendly protections will be eliminated under the new law, including accelerated forgiveness, interest subsidies and flexible income calculations. The law also shrinks the safety nets that struggling borrowers once relied on to pause payments temporarily. Delinquency risks will grow, and borrower margins for error will narrow. In short, borrowers are experiencing confusion and financial pain and need support.

Limited window to lock in lower payments

The good news: Within this chaos lies a critical, time-limited opportunity. For the next two years, borrowers can take action to lock into more generous legacy IDR plans before they disappear. Doing so can preserve access to lower payments and faster forgiveness. The sooner borrowers adjust their payments, the more they will save. If they don’t act in time, many will face higher monthly payments and an additional decade or more in debt.

For employers, this isn’t just a federal policy change, it’s a critical opportunity to impact your employees. Navigating student loan repayment is already complicated, with these new changes only making the situation harder. HR teams are now uniquely positioned to help employees understand the implications and take steps before the deadline. Connect them with trusted resources to guide them through plan selection and ensure they act before eligibility windows close.

For HR leaders, this is not a distant policy issue, it is already impacting the workforce. Even before the new law, recent data shows that financial anxiety, especially tied to student debt, directly affects employee productivity, retention and engagement. According to a national survey of more than 3,000 U.S. borrowers, two-thirds describe their loan payments as a “significant financial burden,” and more than half are not confident in their repayment strategy. A vast majority, 81% of employees, are interested or very interested in student loan assistance benefits to address these concerns.

How employers can respond effectively

The bottom line is that if you haven’t added student loan benefits to your financial wellness strategy yet, this is the time to do it. Student loan benefits are likely more relevant to more of your workforce than ever before, and many employees now view these benefits as a “need to have” rather than “nice to have” when selecting an employer.

Here are the key ways HR can get ahead of employees’ needs:

1. Support with federal repayment and forgiveness programs

Many employees are eligible for federal and state programs like IDR plan and Public Service Loan Forgiveness (PSLF), but the system is deeply complex, and recent policy changes are making it even harder to navigate. Employers can offer guidance by partnering with third-party providers to help workers enroll in federal repayment plans that make payments more affordable, avoid costly mistakes, prevent missed deadlines and track progress toward forgiveness—especially for nonprofit, hospital and government workers. Guidance from a trusted student loan expert is key to getting employees to take action to make sure they are in the appropriate plan and making the best decisions for their financial goals.

2. Direct contributions to student loans

Under IRS guidance, employers can make tax-free contributions of up to $5,250 annually directly toward employees’ student loans, and this benefit is now permanent thanks to the newly passed legislation. The new law even future-proofs the benefit with annual inflation adjustments. These payments can go straight to loan servicers, helping borrowers pay down their principal faster and avoid compounding interest. This is the most capital-intensive path, but it delivers the most immediate, measurable impact. It is also a powerful tool for recruitment and retention efforts.

3. Student loan retirement match via SECURE 2.0

For employees torn between paying down debt and saving for the future, the SECURE 2.0 Act offers a compelling solution: Employees can now qualify for their employer retirement match by paying their student loans. This helps workers who’ve fallen behind on retirement planning get back on track without requiring them to choose between financial survival today and long-term stability tomorrow. It’s an incredibly powerful benefit for student loan holders struggling with long-term financial wellness planning, and offers a far greater long-term ROI than short-term perks like signing bonuses or stipends.

HR’s hero moment

The student loan system is undergoing its most dramatic transformation in decades. Borrowers face higher risks and fewer protections, and the path to relief is growing narrower. But for the next two years, employers can help workers access smarter repayment options, protect themselves from future debt burdens and gain peace of mind during a period of enormous financial transition. This is a chance to truly impact your workforce.

The answer to the “Why add student loan benefits now?” has never been clearer, and the sense of urgency is very real. Those who act now won’t just respond to the crisis, they’ll help their people navigate it. And that’s the kind of leadership today’s workforce won’t forget.