Skip to Main Content Back to Main Website
Back to Main Website

Your Legacy,
Our Future

Planned Giving is essential to the mission of the Diocese of Toledo, providing long-term financial stability and ensuring the continuation of its ministries. Through thoughtful estate planning, donors can leave a lasting legacy that supports parishes, schools, charitable programs, and faith initiatives for generations to come. These gifts help sustain vital outreach efforts, educational opportunities, and pastoral care, reinforcing the Diocese's commitment to serving the spiritual and material needs of its community. By including the Diocese in their estate plans, donors become stewards of faith for the future by fostering Holy Disciples, Holy Families, Holy Vocations. Learn About Ways to Give

Giving Home > Giving News > Washington News > No Tax on Employer Student Loan Payments

No Tax on Employer Student Loan Payments

Published August 8, 2025

On August 6, 2025, the Internal Revenue Service (IRS) reminded employers that student loan payments can be included as part of their educational assistance programs. Employers may pay up to $5,250 each year toward educational benefits.

The Federal Student Aid data indicates that an average student loan balance at graduation is $38,375. This loan amount will be lower for a bachelor's degree and higher for a master's or doctoral degree. The average student debt for a bachelor's degree is now $29,300. Because there are additional costs for a master’s degree, the average debt for those students is $66,000. Finally, the largest debts are generally for individuals who have attended medical school. The average debt for doctors who graduate after eight years of education is $264,000.

Student debt is generally lower for individuals who attend public universities. Since tuition is higher at private colleges and universities, attendees frequently graduate with larger debt.

The estimated total student loan debt is now approximately $1.77 trillion. This debt is spread among thousands of students. The average annual payment on student loans is $6,432. The Education Data Initiative reports that many borrowers take up to 20 years to pay off student loan debt. The approximate interest rate for student loans is currently 6.5%.

With substantial amounts of student loans, the employer loan payment is welcomed. The educational assistance of $5,250 is usually allocated towards tuition, books, or other educational expenses. However, the employer may allocate up to this amount to repay student loans. If the employer repays the student loan, the time for repayment of the loan balance may be greatly reduced.