Davis, Graham Introduce Bill Allowing Employers to Assist Employees with Student Loan Debt
U.S. Rep. Rodney Davis (R-Ill.) and Gwen Graham (D-Fla.) today introduced legislation, the Employer Participation in Student Loan Assistance Act, to help individuals pay down their student loans. The legislation would provide a new tool to help employers recruit and retain employees by allowing them to help employees repay student loans with pre-tax dollars.
Davis’ district includes eight four-year colleges and universities as well as five community colleges and is home to roughly 150,000 students.
“Seven in ten college seniors last year graduated with student loan debt – which now represents the second highest form of consumer debt,” said Davis. “The Employer Participation in Student Loan Assistance Act encourages employers to be part of the solution by allowing them to offer an employee benefit that will help graduates pay down their student debt. With outstanding student loan debt totaling more than $1 trillion, we must find ways to engage the private sector and help graduates manage their debt.”
“Too many students are receiving a great education but graduating with a burden of debt that prevents them from buying a home, saving for retirement or pursuing their preferred career,” said Graham. “Democrats and Republicans agree we need to address this issue, and the Employer Participation in Student Loan Assistance Act is common sense bipartisan legislation that will make a big difference in helping students pay off their loans.”
“The Illinois Chamber of Commerce applauds Congressman Davis for introducing this important legislation, which will provide another option for employers to help attract quality employees," said Todd Maisch President and CEO of the Illinois Chamber of Commerce.
Currently, the Employer Education Assistance Program allows employers to contribute pre-tax earnings to help employees finance continued education, but does not allow relief for individuals who already have incurred student loan debt in the course of their undergraduate or graduate careers.
The Employer Participation in Student Loan Assistance Act provides incentives to employers to subsidize student loan repayments for their employees in the same way employers today can subsidize ongoing tuition expenses.
Benefits to employees include:
• Will receive a tax-exempt benefit of up to $5,250 per year to pay on their already incurred student loan debt.
Benefits to employers include:
• Permits employers to assist employees who already have student loans to the same degree they can help employees with continued education.
• Helps companies recruit and retain young, educated talent.
• Employers can deduct the subsidy provided to employees.