Senators John Thune, R-South Dakota, and Mark Warner, D-Virginia, have introduced the Employer Participation in Repayment Act, which would permit employers to contribute up to $5,250 tax-free to their employees’ student loans.
The bill would expand the Employer Education Assistance Program, which only provides assistance for workers who are seeking additional education, but does not benefit individuals who already have incurred student loan debt. The legislation has also been introduced in the House of Representatives by Reps. Rodney Davis, R-Illinois, and Scott Peters, D-California, and has support from numerous educational organizations.
The senators issued a press release noting that one in four Americans have student loans, and that these loans total $1.5 trillion in the U.S.
“Today’s economy is strong, and I believe we should keep our foot on the gas by passing commonsense bills like the one Senator Warner and I have proposed that would give young career seekers additional tools to help overcome the burden of student loan debt and empower employers to attract future talent,” Thune said. “It’s no secret that as today’s college graduates look toward the next chapter in life, they often trade their cap and gown for debt and uncertainty. This bipartisan legislation, which I view as a win-win for graduates and employers, is good policy and one that I hope garners strong support.”
Warner added: “As the first in my family to graduate from college, I relied on student loans when college tuition was much lower than it is today. Unfortunately, as the cost of higher education continues to skyrocket, so has the rate of Americans who turn to student loans to pay for college. That’s why I’ve teamed up with Senator Thune to create an innovative, bipartisan approach to help ease the burden of student loans. By making employer student loan repayments tax-exempt, employers will have a new tool to recruit and retain a talented workforce while also helping working Americans manage their financial future.”