Contract Offers with Loan Repayment

If your contract offer includes loan repayment, WHEN the money is passed to you is just as important as the total amount.

Most organizations will offer to pay a portion of your student loans as part of your compensation. Because the IRS considers that payoff earned income, these organizations will also pay you additional funds to offset the tax liability that results.

The best employers will assume your student loan payments for the duration of your contract. Around tax time, they’ll give you a “bonus” to help you offset the taxes you owe.

However, very few employers qualify as “the best.”

Most commonly, companies will have you make your monthly student loan payments and then once a year, usually around tax time, reimburse you a year’s worth of the promised pay off, plus the amount of any tax liability.

That’s ok, but they still may try to screw you out of that last big payment.  Read on.

The ones you have to watch out for are those who promise to hand over the entire sum of promised loan re-payment at the end of your contract.

They will almost certainly not pay what they promise, that is unless you agree to re-up your contract for another couple of years.  They know you won’t sue them for it, it’ll cost you too much. It’s easier for you just to sign on for another couple of years.

It’s illegal, unethical and despicable behavior.

Yet it happens all the time.

So, no matter how perfect the job is, if they offer their loan repayment in bulk at the end of your contract and they tell you it’s non-negotiable—run.

If you don’t, you’ll regret it.

They’re dealing with you in bad faith.