WASHINGTON (CBS19 NEWS) - A bill has been introduced in the U.S. Senate to help Americans tackle student loan debt.
Senators Mark Warner of Virginia and John Thune of South Dakota introduced the Employer Participation in Repayment Act, which would allow employers to contribute up to $5,250 tax-free to their employee's student loans.
According to a release, this could help employees with much-needed relief and employers with a tool that will help them attract and retain employees.
“As the first in my family to graduate from college, I wouldn't have been able to afford my college tuition without the help of student loans,” said Warner. “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. Today, too many Americans are saddled with tough-to-manage student loan debt, with no end in sight. 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 manager their financial future.”
Thune says the bill would give young career seekers additional tools to help them overcome the burden of student loan debt, and he says this is a win-win for graduates and employers that he hopes garners support in the Senate.
One in four Americans have student loans, and such debt in the United States reached $1.5 trillion in 2018.
The release says student debt is a significant financial burden that influences the way the workforce saves and spends, but it also has a stifling effect on the economy.
This bill would update an existing federal program so that it works better for employees living with student loan debt.
Under current law, the Employer Education Assistance Program provides assistance for workers who are seeking additional education, but it does not offer assistance to those who have already incurred student loan debt during undergraduate or graduate studies.
Representatives Scotts Peters of California and Rodney Davis of Illinois have introduced the same bill in the U.S. House of Representatives.