SAN DIEGO – A recent Wall Street Journal article highlights how a bill introduced by Rep. Scott Peters (CA-50) that is now law has helped workers save thousands of dollars each year in student loan debt repayment, as well as help employers recruit and retain workers, and generate goodwill in a workplace.
As part of his commitment to help young Americans prosper, Peters introduced and helped pass the Employer Participation in Repayment Act as part of the CARES Act in March 2020. The bill incentivizes employers to support their workforce by making employer-provided student loan payments tax-exempt up to $5,250 per year. The bill received a five-year extension under the FY21 federal spending package signed by former President Trump.
As American workers’ priorities shift as a result of the COVID-19 pandemic, small and large companies are offering student loan repayment benefits to their employees. The Wall Street Journal article refers to several experts including UC San Diego economist Uri Gneezy, who says these directed payments to help pay off employees’ student loans can mean more than a raise to employees.
The Wall Street Journal lists different companies nationwide making use of this law, including a software company that offers workers $1,400 per year towards student debt and an education-technology company that offers workers who stay for at least two years between $4,000 and $6,000 annually.
Over 40 million Americans have a combined $1.6 trillion in federal student loan debt. Borrowers will have to resume paying their loans as soon as 60 days after the Supreme Court makes a decision regarding President Biden’s student loan forgiveness plan.