Press Releases

~ As of the end of 2023, Americans owe a combined $1.74 trillion in student loan debt ~ 

 

WASHINGTON, D.C. – Today, Representatives Scott Peters (D-CA-50) and Nicole Malliotakis (R- NY-11) and U.S. Senators Mark Warner (D-VA) and John Thune (R-SD) introduced the Employer Participation in Repayment Act – bipartisan legislation to help Americans tackle their student loan debt by making permanent a tax provision that allows employers to contribute up to $5,250 tax-free to their employees’ student loans.

 

In 2020, Rep. Peters along with Sens. Warner and Thune negotiated the inclusion of a provision in the CARES Act that allowed these contributions temporarily. Later that year, as part of the government spending package, they secured an extension allowing this benefit through the end of 2025. By making this tax benefit permanent, today’s legislation would provide employees with much-needed relief and employers with a unique and permanent tool to attract and retain talented employees.

 

“I relied on student loans to get through college when the cost of higher education was much lower than it is today. Now, the collective debt among Americans is $1.7 trillion, which limits our economic growth and the economic prospects of young adults,” said Rep. Peters. “Over the last four years, this program has been a huge success — employers have helped pay off thousands of employees’ loans and it gave employers a tool to compete for the best talent. This public-private collaboration has proven itself as a cost-effective solution to the student debt crisis and it is imperative that we make it permanent.” 

 

"Over the past 20 years, the cost to attend college has risen 45 percent, forcing students to choose between pursuing higher education and taking on tens of thousands of dollars in burdensome student loan debt," Rep. Malliotakis said. "Our bipartisan legislation will allow millions of students and recent graduates to continue receiving reimbursement through their employer up to $5,250 per year tax-free, which can be used to repay student loans, pay tuition, and purchase required books, supplies, and equipment for academic courses. This tax incentive will continue to strengthen our workforce, increase our nation’s competitiveness, and provide much-needed economic relief to millions of Americans who are struggling to make ends meet during this time of record-high inflation."

 

“Too many young Americans are struggling under the weight of student debt, preventing them from establishing savings, buying homes, and building wealth,” said Sen. Warner. “My Employer Participation in Repayment Act took an important step to help folks pay down their debt while also giving employers a powerful tool to recruit and retain the best talent, but it’s set to expire soon. I’m proud to be pushing to make this benefit permanent so we can grow our economy and support the middle class by supporting recent graduates and employers alike.”  

 

“Incentivizing employers to help repay their employees’ student loans was a common-sense step Congress took to address the high levels of student debt that borrowers face,” said Sen. Thune. “The Warner-Thune bill would permanently equip employers with this unique tool to help attract and retain talented employees while protecting American taxpayers from costly burdens. This is a win-win for graduates and their employers, and I hope it will once again garner strong, bipartisan support.”

 

Reports estimate that Americans owe a combined $1.74 trillion in student loan debt. This debt is a significant financial burden that not only influences how the American workforce saves and spends but also has a stifling effect on the economy. This legislation would update an existing federal program so that it works better for employees living with the reality of burdensome student loan debt.

 

 

The legislation has support from the following educational and business organizations:

 

“We are proud to continue to support this initiative and thank Congressmember Peters for his commitment to San Diego’s small businesses. By expanding the benefits employers can offer employees through student debt repayment, the Employer Participation in Repayment Act of 2024 is helping strengthen efforts to attract and retain workers, especially for small business owners,” said Jerry Sanders, President and CEO of the San Diego Regional Chamber of Commerce.

 

“The American Council on Education strongly supports the Employer Participation in Repayment Act, which would make permanent the CARES Act expansion of Sec. 127 to cover student loan repayment assistance. Many Americans are paying off student loans while balancing the needs of their families and achieving new skills to advance in their careers. This legislation would provide employers the opportunity to support their employees in pursuing education and/or to manage their student loan debt, which represents a win-win for employers and employees. This expansion of Sec. 127 potentially also could generate substantial private sector funds for student loan repayment through a new public-private partnership to help ease the burden of future and current student loan debt on students and recent graduates. Thank you for your leadership on this important issue,” said the American Council on Education (ACE).

 

“AICCU is proud to endorse the Employer Participation in Repayment Act, introduced by Congressmembers Nicole Malliotakis and Scott Peters. The independent higher education sector in California enrolls 54% of California graduate students, making the sector the leader in educating the state’s advanced workforce. This bill would make permanent the expansion of Section 127 and will encourage employees to complete their degrees or aspire to upskill and attain a certificate or advanced degree and reinvest them back in with their employer. This is a win-win-win situation for all—the employer, staff, and the postsecondary institution. Thank you, Congressmembers Peters and Malliotakis, for your joint leadership on this critical issue,” said Kristen Soares, President of AICCU.

 

“Employers and workers alike have benefited from the COVID-era laws allowing Section 127 benefits to be provided to employees for the purpose of repaying student loans. Unfortunately, when the bills were signed into law, Congress included an expiration date for the end of 2025, meaning employees could soon be stripped of a benefit that has eased the financial burden of repaying costly loans during a time of high inflation, and employers could lose a benefit they have offered to attract and retain employees. CUPA-HR therefore fully supports this bill to ensure modern Section 127 benefits are made permanent,” said Andy Brantley, President and Chief Executive Officer at the College and University Professional Association for Human Resources (CUPA-HR).

 

“The Consortium of Hospital-Affiliated Colleges and Universities (CHACU) endorses this important legislation to make the student loan repayment expansion permanent.  It provides confidence to students entering critically in-demand healthcare careers such nursing, as well as the hospitals seeking to attract and retain them.  Thank you for this legislation which will strongly support nursing and allied health education,” said Nate Brandstater, President of Kettering College and CHACU Member.

 

“Fidelity Investments commends the bipartisan introduction of the Employer Participation in Repayment Act. As a market leader for student debt workplace benefits since 2016, Fidelity applauds the proposal to create a permanent path for employers to seamlessly contribute to and ease the student debt burden of their employees. Originally enacted as part of the CARES Act, this bill ensures an impactful public-private solution to the country’s growing student debt crisis that can continue to enhance the financial well-being of hard-working Americans and bolster the recruiting and retention strength of companies seeking to offer this benefit. We look forward to working with Congress to enact this legislation into law,” said Jesse Moore, senior vice president, head of Student Debt at Fidelity Investments.

 

“The National Association of Independent Colleges and Universities (NAICU) is pleased to support bipartisan legislation that would make permanent the expansion of IRC Sec. 127. This expansion to allow student loan repayment assistance should absolutely be a permanent benefit and not expire next year as currently scheduled.  This assistance helps working students, employers, and ultimately the U.S. economy. Section 127 benefits play a critical role in maintaining U.S. competitiveness and preventing the accumulation of student debt by enabling employers to fund the training, development and education of their employees, without imposing tax burdens on those employees for the education they receive.  Employees use these benefits to pursue their educational and career goals and use amounts provided by their employer to either help pay for the cost of tuition or repay student loans,” said Karin Johns, Director of Tax Policy at the National Association of Independent Colleges and Universities.

 

“The National Association of REALTORS® (NAR) has long supported efforts to ease the burden of student loan debt. The Employer Participation in Repayment Act is a useful tool in easing the weight of student debt. NAR applauds the leadership from Representatives Peters and Malliotakis and Senators Warner and Thune in making this change permanent. This legislation creates a win-win for both employers in search of attracting and maintaining talented workers and employees who will receive relief on their debt, enabling them to save money for important life decisions like purchasing a home,” said Kevin Sears, President of the National Association of Realtors®.

 

“SHRM is proud to support the Employer Participation in Repayment Act, a bipartisan bill that would permanently allow employers to help employees pay off their student loans. SHRM has long championed policies that allow employers to offer education assistance programs that meet the needs of today’s workforce. This legislation would benefit millions of Americans who are struggling with student loan debt, while simultaneously providing employers with a strategic advantage in attracting and retaining top talent in a competitive job market,” said Emily M. Dickens, Chief of Staff and Head of Government Affairs at SHRM.

 

"Extending the tax exclusion for employer-provided student loan repayment assistance is crucial for today’s U.S. workforce and is 100% aligned with employer perspectives on these benefits. As the cost of higher education continues to skyrocket, this benefit enables companies to foster a more educated and skilled workforce, while helping their employees cover basic living expenses, a challenge for so many people today. Since Tuition.io started administering contributions in 2016, employers on our platform have helped pay down student loan debt for hundreds of thousands of employees in key sectors like healthcare, manufacturing, and technology. We at Tuition.io strongly support making these benefits under Section 127 permanent, as their removal would be a significant setback for both corporations and their employees,” said Scott Thompson, CEO of Tuition.io.

 

Full text of the legislation can be found here. A summary of the legislation can be found here.

 

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