Two House members are hoping that their fellow politicians can put their partisan issues aside in an effort to tackle the student loan debt issue.
Rep. Rodney Davis (R-IL) and Rep. Gwen Graham (D-FL) introduced their Employer Participation in Student Loan Assistance Act which would offer tax incentives for both employers and their employees paying off their student loan debt.
HR795 would give businesses the chance to offer a tax-free advantage for tuition assistance. In addition, workers would get a tax-exempt benefit of up to $5,250 per year to use towards student loan debt.
Both Reps believe that this bill can help borrowers not only pay off their loans quicker, but it will also help the economy. About 40 million Americans are carrying a combined $1.4 trillion in student loan debt—and many are having difficulty making their monthly repayments after graduation. At the press conference, Davis cited one recent graduating class with more than a 10 percent default rate on their student loans.
The financial burden of being in debt for sometimes tens of thousands of dollars means that these borrowers can’t afford to buy a house and make other purchases that boost the economy. This could be why student loans have become a hot topic on Capitol Hill, with a number of legislators presenting bills designed to help borrowers pay off their debt faster. One program is even considering folding student loan debt into a mortgage, which would help the real estate market and enable borrowers to potentially lock in lower interest rates.
While there is no budget in place for HR795, it does have the support of more than 30 House members and a number of representatives of several private companies.
Commenting on the bill, “Too many students are receiving a great education but graduating with a burden of debt that prevents them from buying a home, saving for retirement or pursuing their preferred career,” said Graham. “Democrats and Republicans agree we need to address this issue, and the Employer Participation in Student Loan Assistance Act is common sense bipartisan legislation that will make a big difference in helping students pay off their loans.”
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