Apr 2, 2025
For many young professionals, student debt is a long shadow over early working life. In 2023, around 45% of students had a loan, with an average of €11,800 for under-25s (Netherlands Institute for Youth). Beyond the financial drag, debt can weigh on mental health and motivation. Employers can help, practically and credibly, by enabling repayment through the workplace, lifting satisfaction and strengthening the employer brand.
Why it belongs in your benefits mix
Debt sits near the top of Gen Z and Gen Y money worries. Addressing it signals that you understand real life, not just policy. Employees who receive tangible help feel seen and are more likely to stay. For employers, the Dutch framework offers an additional incentive: within the Work-Related Costs Scheme (WKR) and the Individual Choice Budget (IKB), repayment can be structured in a fiscally efficient way. In other words, you can help without creating unwieldy costs or administrative headache.
Real-life relevance: debt sits near the top of Gen Z and Gen Y financial worries. Address it and your offer cuts through.
Retention and morale: practical help signals appreciation; people stay where they feel seen.
Fiscal efficiency: within the Dutch framework, the Work-Related Costs Scheme (WKR) and Individual Choice Budget (IKB) can make repayment more attractive when designed correctly.
How does student debt repayment work through the employer?
There are various ways in which employers can facilitate student debt repayment:
Repayment by the employee: The employee pays (part of) the student debt to DUO and then claims this amount within the Work Costs Scheme (WKR) via the IKB.
Setting a maximum amount: As an employer, you determine the maximum amount an employee can allocate per year for repaying the student debt, for example, aligned with tax opportunities or an internal budget.
Flexible exchange: Within the established limits, employees can decide which amount they want to exchange and thus optimally benefit from the tax advantage.
Simple administration: Changes can be easily downloaded via the Alleo portal and directly processed in the payroll system, making the exchange quick and efficient without extra administrative burdens.
What are the benefits of student debt repayment for employers?
Offering student debt repayment through the employer provides numerous benefits:
Attractive employer brand: this offer is particularly appealing to Generation Z and Generation Y, who often struggle with student debt, making the employer more attractive to this demographic.
Flexibility for employees: employees can decide how to spend their budget, helping them achieve their financial goals and improve their well-being.
Increased employee satisfaction: employees who are helped with their student debt feel valued, which strengthens their loyalty.
What are potential downsides and challenges of student debt repayment?
Limited WKR space: the WKR offers limited space per employee, often just a few hundred euros per year, making it difficult for employees with larger debts to pay off their debt completely.
Inequality within the organization: not every employee has student debt, which can cause discontent among employees who cannot benefit from the scheme.
Administrative burdens: setting up and managing a student debt scheme can lead to extra administrative tasks, such as tracking payments to DUO.
Offer flexibility in employee benefits with the IKB
The Individual Choice Budget (IKB) gives employers a practical way to personalise rewards without losing control. Employees can direct approved sources, such as holiday pay or bonuses, towards what matters to them, from wellbeing and learning to reducing student loan balances. The result is tangible: higher satisfaction, better uptake of benefits and a stronger employer brand because support feels relevant, not generic.
Curious about how you can integrate student debt repayment into your benefits?
Discover the possibilities of the Individual Choice Budget in our webinar via this link, where we discuss the advantages and implementation in detail.
Prefer to read about this topic?
Download the student debt repayment via employer whitepaper for more information on repaying student debt through the Individual Choice Budget.
