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If you’re among the millions of Americans working to repay your student loans, a recently proposed bill may make it easier for employers to help you pay down your debt.
Currently, U.S. businesses can get a tax break for providing up to $5,250 per year for tuition assistance to employees under an education-assistance program. Now a bipartisan measure, recently proposed by Sens. Mark Warner, D-Va., and John Thune, R-S.D., would allow businesses to receive the same tax break for helping employees with existing student loan debt.
Though some companies are already offering student loan repayment as an employee benefit, this tax incentive could make businesses more willing to help employees who are struggling to repay college debt.
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A recent New York Federal Reserve Bank report found that American student loan debt now totals around $1.5 trillion, more than 10% of Americans’ total debt — and that includes credit card, auto loan and mortgage debt.
While there are some employers already offering student loan repayment benefits, and certain career paths that may offer repayment assistance programs, both are currently available at only a small fraction of workplaces or focus on the public-service sector.
The latest legislative measure is important because it could make it appealing for more companies to help their employees with student loan debt, assisting many working Americans in reducing a significant portion of their debt burden. And, as the thinking goes, if people have more money in their pockets at the end of the day, they may be more likely to spend, driving economic growth.
At the same time, there are concerns that incentives like this could drive people to stay in jobs that aren’t the best fit due to restrictions on how long an employee needs to remain with the employer to benefit from the program.
This recently proposed bill isn’t actually so new, having been originally introduced in 2016. Reintroduced under a new Congress, the current bill has 17 additional co-sponsors on both sides of the aisle in the Senate, and a version introduced in the House has 100 bipartisan co-sponsors.
If passed, the measure could be a boon to student-debt holders, but it’s unclear whether the current measure will receive the votes needed, seeing as the previous bill didn’t make it through Congress.
If you want to make your voice heard on the issue of student loans, contact your members of Congress. Meanwhile, you can follow the bill’s progress as legislators decide whether to make student loan debt repayment more appealing for employers.