U.S. Rep. Rodney Davis’ (R-Ill.) bill to engage employers and help address the growing student debt crisis was featured yesterday at the Employee Benefit News’ Benefits Forum & Expo, a national employee benefits expo held annually for businesses across the country.
H.R. 795, the Employer Participation in Student Loan Assistance Act, which has nearly 100 cosponsors, would allow employers to use a tax benefit currently available for continued education to pay down an employee’s existing student loan debt.
Last week, more than 100 entities representing educators, employers, and workers, including Starbucks, Verizon, Hewlett-Packard (HP), and the United Auto Workers, urged the Committee on Ways and Means to include the bipartisan student loan bill (H.R. 795) as part of tax reform.
Employee Benefit News (EBN) was there to cover the forum. Highlights include:
‘“This is a bill to help [college graduates] when they get out,” Davis said. “It’s not a chance for colleges to charge more” because employers will pay for those costs once students are hired.’
“Companies such as Aetna and PwC offer student loan benefits for up to $10,000 and $7,200, respectively; however, employees pay taxes on those benefits.
“The bill, H.R. 795, would expand Section 127 of the IRS Code, to count student loan repayment benefits as tax-exempt educational expenses. It would let employers make up to a $5,250-per-employee tax-free contribution toward their workers’ student loans.
“Companies might require employees to make their primary payment to receive the benefit, Thompson [Tuition.io CEO Scott Thompson] said. Employees are more likely to make those payments if they’re also receiving an additional monthly contribution from their employers to pay down the principal balance…
‘“I don’t think Washington takes it seriously enough,” Davis said. “I don’t think the companies that would benefit the most take it seriously enough.”
“Davis encouraged the employers in the audience “to take a risk” and reach out to their Congressional members to show support for student loan assistance legislation.
'“This is the best time that groups like this, those involved in employee benefits... to push this issue forward,” Davis said.”