As Millennials start to dominate both the job market and workforce, experts expect the number of employers offering student loan repayment to grow.


Only about three percent of employers currently offer loan repayment, but large employers and startups are among those who do, indicating it will become a trend in the future. “Research shows a student loan repayment benefit to be a powerful recruitment and retention tool: 76 percent of respondents to American Student Assistance’s ‘Life Delayed’ survey agreed … their choice to take a job would be considerably decided based on an employer’s willingness to offer a student loan repayment program,” writes Allesandra Lanza for U.S. News and World Report.


Employers have many factors to consider related to loan repayment. Savvy employees, too, should be thinking about things like how such benefits are taxed. No tax breaks exist for either employer or employee for loan repayment. The federally proposed Student Loan Repayment Assistance Act could alleviate some of the taxes associated with loan repayment, but hasn’t yet become law. For now, Jillian Berman writes for The Wall Street Journal, “potential recipients need to do some calculations to determine how much of a benefit they actually would receive after taxes.”


Still, the offer of loan repayments could be worth goodwill for an employer doing heavy recruiting. Millennials see those who offer it as being attuned to their needs, Berman writes. Employers will need to pay attention. “Millennials now account for the largest demographic in the workforce and are likely to begin demanding the benefit,” she writes. “With the job market recovering, Millennials will have more clout when evaluating job offers.”


And, employers may be able to get around tax issues with a new concept that would encourage both loan repayment and retirement savings, which are also a challenge for Millennials.


Prudential Retirement is partnering with Student Loan Genius to offer what’s called a 401(k) contribution feature, writes Stephen Miller for the Society for Human Resource Management. The employer makes a pretax contribution to the employee’s 401(k) whenever the employee pays toward his or her student loan, “whether or not they contribute to their 401(k) plan or receive matching contributions.”


“As student loan debt grows, workers are having to choose between paying off their student loans or prioritizing other important financial goals,” Miller writes, quoting Jamie McInnes, senior vice president for Prudential Retirement. “Our research tells us many workers will choose to pay down debt rather than save for retirement.”


This solution could also be appealing to Millennials who don’t yet have the capacity to save and are missing out on the opportunity to let their retirement money grow. “It’s too soon to predict whether this approach will catch on as an alternative to employers directly helping to repay student loans,” Miller writes, “but it highlights growing concerns over the debt burden—and savings challenges—confronting the Millennial workers that companies want to attract and retain.”