Two Southwestern Illinois congressman, Rodney Davis and Mike Bost, are among a bipartisan group of 99 lawmakers that have reintroduced a measure that would encourage employers to offer student loan assistance to help their employees pay off student loan debt.
The Employer Participation in Repayment Act would incentivize employers to offer student loan assistance. The bill would help companies recruit and retain employees by making student loan payments by employers tax exempt up to $5,250 a year — similar to tax exemptions for tuition assistance programs.
“Student loan debt is now the second highest form of consumer debt and prevents many in the workforce from fully contributing to our economy,” said Davis. “Student loan debt is such a major issue that some private companies have found that offering a benefit to help employees pay down their student loans has allowed them to recruit and retain young talent. Our bill simply builds on this private-sector approach to addressing the student loan debt crisis in this country by allowing this benefit to be tax-free to both the employee and the employer. This innovative approach to student loan debt that has the potential to be the 401(k) of student loans and help millions of graduates who are struggling with student debt.”
The collective debt among students in the U.S. is more than $1.5 trillion dollars, which the bill’s supporters say hurts economic growth. Many employers have successfully helped their employees pay down their debt and encouraging similar programs across the country is seen as a move to solve the student debt crisis. The economy benefits when Americans begin making investments like buying a home, starting a family, or saving for retirement, the bill’s supporters said.
Davis first introduced the bill in the last Congress. The Senate also plans to introduce an identical bill in the Senate.
Davis’ district includes eight four-year colleges and universities as well as five community college districts and is home to roughly 150,000 students.
Bost said the bill would help companies recruit and retain employees by making student loan payments by employers tax exempt up to $5,250 a year — similar to tax exemptions for tuition assistance programs.
“The average college graduate with a bachelor’s degree leaves school with almost $30,000 in student debt,” said Bost. “This growing burden of student loan debt not only holds back many American workers, it also puts a troubling strain on our nation’s economy. I’m proud to support this bipartisan legislation to incentivize employers to invest in their workers and strengthen our economy.”