New legislation would encourage employers to help their workers with student loan debt — to the tune of up to $5,250 a year.
The bill, introduced in the U.S. House of Representatives last month, is referred to as the Employer Participation in Student Loan Assistance Act, or House Resolution 795. It is currently in committee.
The legislation would amend the U.S. tax code, making employers’ payments of qualified student loans tax-deductible. That’s how employer-provided tuition assistance is currently treated under the tax code.
In a press conference Thursday, two of the bill’s proponents — U.S. Reps. Rodney Davis (R-Ill.) and Scott Peters (D-Calif.) — described the nation’s ballooning student debt as something that affects the entire economy.
Peters spoke out of personal experience:
“I would not have been able to attend college without student loans and work study programs, but the rising burden of student loan debt has weighed down graduates and is a drag on our entire economy. Just as allowing employers to offer tax-free tuition assistance has enabled more Americans to advance their education, offering this same incentive for student loan payments will speed up the repayment process so that graduates can begin to make investments such as buying a home, starting a family, or saving for retirement.”
In 2016 alone, student debt in the U.S. increased by $78 billion, or 6.3 percent. Even retirees are haunted by student loan debt.
Some employers, such as Fidelity Investments, have voluntarily started offering their workers student debt assistance in recent years, but such businesses are a minority.
As Davis put it Thursday:
“Some companies are already offering this benefit because they see the advantage it gives them when recruiting and retaining younger employees, but we want to encourage more to participate so we can help both struggling graduates and our economy.”
If you’re struggling with student loans, hoping the bill will pass is not your only option.
You can get help with student loan debt, among other types of debt, through the Money Talks News Solutions Center. We have partnered with Debt.com to match you with reputable experts who can help craft a plan to eliminate your student debt.
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