Meet ELF™
Employment Loan Forgiveness (ELF™) is Tuition.io's platform solution to administer a Loan Repayment Assistance Program (LRAP) at scale. LRAPs are designed to help fill essential roles facing shortages, including physicians, nursing and other clinical healthcare staff, public school educators, and public defenders. Our ELF solution is IRC compliant and scalable.
The ELF™ Advantage
ELF™ is a tax-efficient alternative to traditional cash compensation — and it drives retention!
Key Advantages:
- 100% Tax-Free: Both the employer and employee avoid federal, state, and local income taxes, as well as payroll taxes (FICA/FUTA).
- No Pre-Tax Limits: Unlike Section 127 benefits (capped at $5,250/year), ELF™ has no limit other than employer funding and the employee’s loan balance.
- Surgical Recruitment: ELF™ does not require broad-based non-discrimination testing, allowing employers to target specific, high-value, hard-to-fill roles.
- Retention-Focused: Benefits are tied to a specific work commitment (vesting period), often 3, 4 or 5 years.
The Financial Impact: Signing Bonus vs. ELF™
|
|
Signing Bonus $100,000
$100,000 2
/ye
Billed Annually
|
ELF™ Contribution $100,000
$100,000 2
/ye
Billed Annually
|
|---|---|---|
Employer Cost |
$107,650+ (includes FICA/salary expenses) |
$100,000 |
Post-Tax to Employee |
~$60,000 | $100,000 |
Paid to IRS |
$47,650+ | $0 |
Retention Risk |
Paid upfront; hard to recoup if the employee leaves. | Paid over time; payments stop if the employee leaves. |
How It Works
Using IRC Section 108(f) — the LRAP provisions— nonprofits can offer large-scale student debt forgiveness with shorter vesting periods than PSLF, maximizing your recruitment and retention ROI.
Tuition.io manages the complex legal and administrative requirements of an LRAP through a seamless digital experience.
The Employee Journey
Enroll
The employee logs into Tuition.io and uploads all relevant student loans.
Validate
Tuition.io validates loan qualifications and calculates a monthly payoff schedule.
Agreement
The employee e-signs a promissory note with Fosterus (Tuition.io's non-profit partner), legally committing to a specified work period.
Relief
The employee stops making personal payments while the employer funds the LRAP.
Forgiveness
At the end of the work commitment, the loan is forgiven 100% tax-free.
The Employer Experience
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Simple Funding: Funding the LRAP is operationally identical to making a standard student loan contribution.
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Direct Administration: Tuition.io administers funds directly to loan servicers and individual accounts.
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Compliance: Our partnership with Fosterus ensures the legal and tax compliance of the Section 108(f) discharge.
Comparison: ELF™ vs. Sect 127
|
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Qualified Educational Assistance Plan Section 127
Section 127 2
/ye
Billed Annually
|
Loan Repayment Assistance Program Section 108(f)
Section 108(f) 2
/ye
Billed Annually
|
|---|---|---|
Maximum pre-tax limit |
$5,250 per year | No limit |
Qualifying employment |
No restriction | Nonprofits + Government entities |
Work commitment |
None | Required |
Non-discrimination testing |
Required | Not required |
Student loan types |
Qualified Student Loans | Defined by Funder |
Ready to Stretch Your Total Rewards Budget by over 40%?
Explore adding an ELF™ program for your most in demand roles and tap into the hidden tax-code advantage your talent strategy has been missing.