Employer-Sponsored Student Debt Repayment

Abstract

This study investigates the welfare implications of allowing workers the option to dedicate their employer-sponsored retirement benefits to the repayment of their student debt. Using a partial equilibrium model, I find that this policy allows for increased consumption while young, while reducing repayment time by approximately 4.5 years. I estimate that the value of this policy to the median male graduate from the 2016/17 Baccalaureate and Beyond Longitudinal Study would be $7,401.60.

Keywords: Higher Education, Student Loans, Employer-Sponsored Benefits

JEL Classification: D14, I22, M52