During discussions with potential clients, one question that comes up from time to time is based on employee student loan payments and payroll. Wondering if they can/should process employee payments through their payroll system. This post helps answer this question and provides rational for our philosophy behind it.
In short, no employers should definitely not process employee’ student loan payments through payroll. If your employees went to college, they probably have bank accounts that offer online bill pay. Your company would provide no utility to its employees by deducting their minimum student loan payments from their paychecks, and would take on undue liability related to the employee’s loan, payment timing, penalties, and interest. Adding unnecessary complexity to a benefit that’s proven to be very administratively simple. It’s best to rely on our loan verification process and terms of use to ensure employees are remaining up to date on their loans.
To learn more about other best practices and answers to your benefit related questions, check out our FAQs page: https://www.getpeanutbutter.com/faqs/