WASHINGTON— U.S. Senator Mitt Romney (R-UT) this week joined Senators John Thune (R-SD) and Mark Warner (D-VA) in introducing legislation to help Americans tackle their student loan debt. The Employer Participation in Repayment Act would allow employers to contribute up to $5,250 tax-free to their employees’ student loans, providing employees with much-needed relief and employers with a unique tool to attract and retain talented employees.
“Today’s economy is strong, and I believe we should keep our foot on the gas by passing common-sense bills like the one Sen. 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,” said Thune. “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.”
“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,” 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 Sen. 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.”
According to reports, one in four Americans have student loans, and student debt in the U.S. reached $1.5 trillion in 2018. Student debt is a significant financial burden that not only influences the way our workforce saves and spends, but also has a stifling effect on the economy. The Warner-Thune bill would update an existing federal program so that it works better for employees living with the reality of burdensome student loan debt. The Employer Education Assistance Program, as currently written, only provides assistance for workers who are seeking additional education. It does not extend to individuals who have already incurred student loan debt during their undergraduate or graduate studies.
Additional cosponsors of the bill include U.S. Senators Richard Blumenthal (D-CT), Roy Blunt (R-MO), Shelley Moore Capito (R-WV), Susan Collins (R-ME), Cory Gardner (R-CO), Maggie Hassan (D-NH), John Hoeven (R-ND), Doug Jones (D-AL), Angus King (I-ME), Ed Markey (D-MA), Chris Murphy (D-CT), Pat Roberts (R-KS), Mike Rounds (R-SD), Jacky Rosen (D-NV), Kyrsten Sinema (D-AZ), Jon Tester (D-MT), and Todd Young (R-IN).
The legislation has also been introduced in the House of Representatives by Representatives Rodney Davis (R-IL) and Scott Peters (D-CA) and has support from numerous educational organizations.
“Too many individuals and families are being hindered by the financial burden of their post-secondary education. Student borrowers deserve access to a broad range of repayment options and loan forgiveness programs that address their variety of needs,” said Marc Egan, Director of Government Relations, National Education Association (NEA). “The NEA is proud to support Congressmen Scott Peters, Rodney Davis, Senators Mark Warner, and John Thune in creating new pathways for individuals to repay their student loans to make college more affordable and accessible for all.”
“The National Association of Independent Colleges and Universities fully supports The Employer Participation in Student Loan Assistance Act of 2019 and Reps. Peters and Davis’s efforts to expand IRC Sec. 127 to allow employers to offer both tuition and loan repayment assistance to their employees,” said Dr. David L. Warren, President, National Association of Independent Colleges and Universities (NAICU). “Incentives like Sec. 127 encourage employers to invest in the education and training of employees at all levels, which ultimately benefits society and the economy. Expanding this benefit to allow employees to also use this tax-free assistance for student loan repayment helps the employees at two vital stages of financing their education. Improving this benefit will encourage more employer and employee participation, and result in a more educated and skilled workforce across the U.S.”
“The National Association of College and University Business Officers (NACUBO) commends Sen. Mark Warner and Rep. Scott Peters for introducing the Employer Participation in Repayment Act,” said Susan Whealler Johnston, PhD, President and CEO, NACUBO. “The benefits currently offered by Section 127 of the tax code are an important tool for employers to attract the best possible employees and build a skilled workforce. While Section 127 is currently a valuable tool in supporting U.S. competitiveness it could, upon passage of the Employer Participation in Repayment Act, become the benefit of choice for tuition assistance and loan repayments among employers. Expansion of Section 127 would benefit employers, employees, students, and families, and help both institutions of higher learning and the U.S. workforce retain a top spot on the global stage.”
“The enhanced ability for employers to contribute to student loan repayment represents an important opportunity to reduce student debt levels,” said J. Noah Brown, President & CEO, Association of Community College Trustees. “We commend Senator Warner and Representative Peters for looking into this issue, as it may assist many community college students who borrow to pay for the cost of attendance of postsecondary education.”
“Students shouldn’t be forced to look toward a future of being stuck in debt, especially when we have so much to offer the workforce and the world,” said Sarah Henry, Director of Legislative Affairs, The Association of Big Ten Students. “As the cost of a college education continues to rise, it is increasingly vital that students have access to programs and resources to assist in loan repayment and forgiveness. The Association of Big Ten Students supports the efforts of Congressmen Rodney Davis and Scott Peters and Senators John Thune and Mark Warner in making a debt-free life more accessible for all and encourages the implementation of programs to reduce student loan debt across the country.”
“In today’s competitive job market, leading-edge benefits are the most powerful tool employers can wield to attract and retain talented workers,” said Johnny C. Taylor, Jr., SHRM-SCP, President and Chief Executive Officer, Society for Human Resource Management (SHRM). “At SHRM, we advocate for efforts that create better workplaces and a better world. We strongly support the Employer Participation in Repayment Act, and I applaud Representatives Peters and Davis, and Senators Warner and Thune for their bold leadership on this critical issue. Expanding employer education assistance helps address the skills gap, which is holding back both workers and employers. When employers are able to help workers pay off student debt, more people will have confidence to pursue higher education and be better prepared to fill high-skilled fields.”
Full text of the legislation can be found here. A summary of the legislation can be found here.