David Klein & Edmund F. Murphy III write: But there’s a problem – this benefit is not tax-advantaged. While 401(k) retirement contributions are tax-advantaged, as are many health and even commuter benefits, student loan repayment benefits are not. The government taxes the student loan contribution as ordinary income for the employee and requires companies to pay the payroll tax on the benefit amount. It’s why only about 4 percent of companies offer this benefit today, even though most companies want to.