Jobs offering student loan repayment

[GastriqueGraffin]

What are usually the terms when a job is offering large amounts in student loan repayment? For example, does it usually mean signing on for a long times and receiving just small amounts of that money at a time? Or does it come from receiving lower salary?

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[Gastrapathy]

Too much variation to answer this question. Just evaluate the total cash compensation from every offer as best you can.

 

[GastriqueGraffin]

Too much variation to answer this question. Just evaluate the total cash compensation from every offer as best you can.

Fair enough. It’s just that I have a large student debt which will continue to accrue if not paid off quickly. So the lower total cash compensation with higher loan repayment may actually make more sense. I guess those will be questions to ask when I start applying for jobs. I was just hoping that there is a general trend with these kind of offers.

 

[gutonc]

Fair enough. It’s just that I have a large student debt which will continue to accrue if not paid off quickly. So the lower total cash compensation with higher loan repayment may actually make more sense. I guess those will be questions to ask when I start applying for jobs. I was just hoping that there is a general trend with these kind of offers.

I'm not sure I understand this rationale.

Are they paying your loans for your directly, or are you getting a "loan repayment bonus"? If the former, I guess it's tax advantageous for you, but if the latter, it's going to be taxed at whatever your (presumably top) tax bracket will be. So in that case, it's just moving money from one pile to another but it's all the same amount of money. There's no magical tax protected category of compensation for you as the recipient. Your employer may be able to avoid paying their half of your payroll tax if they pay it this way, but you're still going to have to pay the man.

 

[GastriqueGraffin]

I'm not sure I understand this rationale.

Are they paying your loans for your directly, or are you getting a "loan repayment bonus"? If the former, I guess it's tax advantageous for you, but if the latter, it's going to be taxed at whatever your (presumably top) tax bracket will be. So in that case, it's just moving money from one pile to another but it's all the same amount of money. There's no magical tax protected category of compensation for you as the recipient. Your employer may be able to avoid paying their half of your payroll tax if they pay it this way, but you're still going to have to pay the man.

Yes, there’s the tax part of it. But there’s also the situation where I have seen jobs listed for a lesser salary but advertise a larger amount in student loan repayment (I’m talking $200K in repayment). So my question was how does that amount usually get distributed? Is it all at once when you start, little by little over time, or only after working there for some time? If it’s like a sign on bonus or moving expenses then it sounds like you wouldn’t even have to stay very long to get it.

 

[gutonc]

Yes, there’s the tax part of it. But there’s also the situation where I have seen jobs listed for a lesser salary but advertise a larger amount in student loan repayment (I’m talking $200K in repayment). So my question was how does that amount usually get distributed? Is it all at once when you start, little by little over time, or only after working there for some time? If it’s like a sign on bonus or moving expenses then it sounds like you wouldn’t even have to stay very long to get it.

Yes. Probably all of the above, depending on what you're looking at.

If I were offering you a contract with $200K in loan repayment, it would be distributed over 4-5 years and there would probably be a payback provision in there somewhere.

Or, I'd just pay you an extra $40-50K/y and call it good.

 

[wamcp]

Fair enough. It’s just that I have a large student debt which will continue to accrue if not paid off quickly. So the lower total cash compensation with higher loan repayment may actually make more sense. I guess those will be questions to ask when I start applying for jobs. I was just hoping that there is a general trend with these kind of offers.

Remember to keep in mind you are paying student loan debt with AFTER tax money. If someone will pay 200k of your loans think of it as the equivalent of receiving 360k in W2 income.