WASHINGTON DC - Student loans are a looming financial crisis and while students are pushing for the federal government to wipe their loan debts clean, others are looking for ways to pay their five and six digit debts.
Illinois' student loans average some of the highest in the nation, over $25,000, according to figures provided by the Federal Reserve Bank of St. Louis.
Employers would be able to offer prospective employees assistance with their students loans and get tax breaks for doing so if legislation Congressman Rodney Davis (IL-13) introduced Wednesday becomes law.
The Employer Participation in Refinancing Act would help individuals pay down their student loans and provide a new tool to help employers recruit and retain employees by allowing them to help qualified employees repay student loans with pre-tax dollars.
“Seven in ten college seniors last year graduated with student loan debt – which now represents the second highest form of consumer debt,” said Davis. “The Employer Participation in Refinancing Act encourages employers to be part of the solution by allowing them to offer an employee benefit that will help graduates pay down their student debt. With outstanding student loan debt totaling more than $1 trillion, we must find ways to engage the private sector and help graduates manage their debt.”
Currently, the Employer Education Assistance Program allows employers to contribute pre-tax earnings to help employees finance continued education, but does not allow relief for individuals who already have incurred student loan debt in the course of their undergraduate or graduate careers.
The Employer Participation in Refinancing Act provides incentives to employers to subsidize student loan refinancing for their employees in the same way employers today can subsidize ongoing tuition expenses.
Identical legislation has already been filed in the Senate by U.S. Sens. Mark Warner (D-Va.) and John Thune (R-S.D.).
