New U of A Benefit Allows Employees to Exchange Leave for Student Loan Payment

The U of A System will soon implement a new program to help manage student loan debt by utilizing annual leave hours. Beginning March 1, the university will launch the Annual Leave Exchange Program, allowing employees to convert unused annual leave into taxable cash payments that reimburse qualified student loan payments. 

The program offers employees another way to stay current on student loan obligations, with exchanged leave appearing on paychecks as taxable additional earnings. 

How the Program Works 

Eligible employees may exchange a portion of their accrued annual leave (up to a value of $7,500 per year) for reimbursement of payments on qualified student loans. The loan must be in the employee's name, even if it was used for a spouse or dependent. When leave is exchanged, the cash value is reduced by 14% in accordance with IRS requirements. After submitting proof of a student loan payment, employees will receive the reimbursed amount in their regular paycheck once the exchange is approved. 

The leave exchange program can be accessed via single sign-on within Microsoft Apps as "PTO Exchange" beginning March 1. Additional program details are available through the UA System Benefits Website.  

Eligibility Requirements 

Employees may participate if they: 

• Hold a position that earns annual leave 

• Maintain at least 80 hours of annual leave after the exchange 

• Have made a qualified student loan payment on or after July 1, 2025 

• Have no disciplinary actions related to leave within the past 12 months 

Only annual leave is eligible for exchange. Sick leave and other leave types do not qualify. 

Faculty and staff can contact their HR partner directly or the HR benefits team with questions regarding this new program.