Bipartisan Bill to Extend Employer Student Loan Benefits

Representatives Scott Peters (D-CA-50) and Nicole Malliotakis (R-NY-11), along with U.S. Senators Mark Warner (D-VA) and John Thune (R-SD), unveiled the Employer Participation in Repayment Act. This legislation seeks to permanently establish a tax provision that allows employers to contribute up to $5,250 tax-free to their employees’ student loans. Originally enacted as part of the CARES Act, this new bill aims to ensure its permanence in Sec. 127.

Americans owe $1.74 trillion in student debt across 43.2 million borrowers, influencing how the American workforce saves, spends, and retires. This legislation aims to update an existing federal program to better serve borrowers across the workforce while also offering tax advantages to employers that provide long-term access to this proven talent acquisition and retention tool.

Extending A Popular Employee Benefit

The bill has garnered widespread support from various sectors, including educational institutions, business organizations, and companies that have already been offering student loan repayment benefits to their employees. For instance, companies like Athletico Physical Therapy have been at the forefront of providing such benefits, recognizing the dual advantage of helping employees manage their student debt while also attracting and retaining top talent in a competitive job market.

Emily M. Dickens, Chief of Staff and Head of Government Affairs at SHRM, the largest Human Resources organization in the U.S., emphasized this legislation’s strategic advantage to employers. She noted that allowing employers to help employees pay off their student loans benefits millions of Americans struggling with debt and provides a significant edge in talent acquisition and retention.

Senator John Thune, one of the bill’s co-sponsors, emphasized the common-sense approach of incentivizing employers to help repay their employees’ student loans. He noted that the bill would permanently equip employers with a unique tool to attract and retain talented employees while protecting American taxpayers from costly burdens. Thune expressed hope that the legislation would once again garner robust and bipartisan support.

Recommended: Helping Employees Make Smart Student Debt Decisions: The Urgent Need for HR Support

Widespread Support From Educational And Business Organizations

The bill has received endorsements from various educational and business organizations, including Fidelity Investments, the National Association of Realtors®, the American Council on Education (ACE), the College and University Professional Association for Human Resources (CUPA-HR), and the Association of Independent California Colleges and Universities (AICCU), amongst others.

These organizations recognize the bill’s potential to generate substantial private sector funds for student loan repayment through a new public-private partnership, easing the burden of student loan debt on students and recent graduates.

The Takeaway

The Employer Participation in Repayment Act represents a significant step towards addressing the student loan debt crisis in the U.S. By making the tax provision permanent, the bill offers a win-win solution for both employers and employees, fostering a more educated and skilled workforce while providing much-needed financial relief to millions of Americans.

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