Meehan, DelBene Introduce HELP for Students and Parents Act
WASHINGTON – Congressman Patrick Meehan (R-Pa.) and Congresswoman Suzan DelBene (D-Wa.) this week introduced the Higher Education Loan Payments (HELP) for Students and Parents Act, bipartisan legislation that will make college more affordable by modernizing how the tax code treats employer contributions toward student loan repayment.
“The average American student graduates with more than $37,000 in student debt and for too many middle class students, a college degree is simply out of reach all together,” said Congressman Meehan. “Many employers offer benefits like student loan repayment programs and matching contributions to college savings plans. These benefits ease the burden of debt and help make a college degree more obtainable for students. But our tax code offers no incentive to offer them. This bill will change that. By incentivizing employers to offer these benefits to their employees, we can enable more students and families to access them. Ultimately it will help Americans graduate with less debt and get out from underneath their debt faster. I’m pleased to have the opportunity to work with Congresswoman DelBene on this effort to make college more affordable for American families.”
“The rising cost of higher education is forcing millions of middle-class students and families deep into debt as they take out higher loan amounts to pay for tuition, fees, textbooks and housing. They shouldn’t be hit by taxes as well,” DelBene said. “Every year in Washington state, 56 percent of graduates from four-year universities leave school with student debt, and on average those students owe more than $23,000 upon graduation. That’s why I’m honored to work across the aisle with Congressman Meehan on this commonsense, bipartisan solution that would help working families and students pay for college.”
"As a company that works with employers across the country to provide student loan assistance programs that help employees tackle student debt, Peanut Butter recognizes and applauds Representative Pat Meehan's HELP for Students and Parents Act as an important tool to align the interests of employers, citizens, and federal government in resolving America's student debt crisis," said David Aronson, CEO of Peanut Butter. Peanut Butter helps companies attract and retain talent by offering student loan assistance as an employee benefit. Experts in benefits administration, Peanut Butter's team and technology provide employees access to information and decision support tools to better manage their debt, and facilitate employer contributions toward employee student loans.
“The HELP Students and Parents Act introduced by Representative Pat Meehan and Representative Suzan DelBene is vitally important legislation in the effort to not only reduce the $1.3 trillion in outstanding student loan debt, but also limit the growth of student debt in the future," said Tim DeMello, the Founder and CEO of Gradifi. Gradifi focuses on student loan repayment solutions for employers looking to offer meaningful benefits for an engaged and empowered workforce.
"Individuals are willing to take on student loan debt now in order to be more attractive applicants and more competitive in the job market," DeMello continued. "But by doing so, these individuals are falling behind financially and our economy is suffering the consequences. Employers are beginning to recognize this and have started to offer new benefits to reward this education and show their gratitude for the efforts of their employees to gain new skills and experience. The legislation introduced by Reps. Meehan and DelBene will encourage and incentivize even more employers to take an active role in the financial well-being of their employees, as well as help prepare the next generation of workforce so our economy can continue to be a global leader in innovation and growth.”
HELP for Students and Parents Act
While a number of employer benefits receive significant tax advantages in order to facilitate their adoption and use, there is no comparable treatment for employer contributions towards an employee’s student loan repayments. This disconnect between current law and the priorities of the modern workforce help explain why, at a time when young workers are clearly in need of student loan repayment assistance, only three percent of companies offer the benefit to employees.
The HELP for Students and Parents Act modernizes how the tax code treats employer contributions towards student loan repayment, supports young workers who want this benefit, and encourages employers to adapt their employee benefit offerings to meet the financial goals of today’s workers.
ü Student Loan Repayment. The bill excludes from income the amount (not to exceed $5,250) that an employer contributes toward an employee’s student debt repayment and provides a tax credit to employers based on 50 percent the amount contributed toward an employee’s student debt repayment.
ü College Savings. The bill excludes from income the amount (not to exceed $5,250) that an employer contributes to a college savings account that an employee sets up for their child and provides a tax credit to employers based on 50 percent of the amount contributed.