U.S. Sen. John Thune (R-S.D.) yesterday reintroduced the bipartisan Employer Participation in Refinancing Act to help individuals pay down student loan debt. The legislation, which is cosponsored by Sen. Mark Warner (D-Va.), would provide a new tool to assist employers in recruiting and retaining quality employees by allowing them to help qualified employees repay student loans on a tax-free basis. It would extend the current Employer Education Assistance Program to employees who have finished their education and have outstanding student loan debt. To be eligible for the loan assistance benefit under the bill, employees must refinance their loans into the private market, which would allow the student to take advantage of lower interest rates than what is currently offered by the federal government.
Currently, the Employer Education Assistance Program allows employers to pay up to $5,250 in educational expenses to help employees finance continued education without being taxed on the employer assistance, but these programs cannot provide help to individuals who already have incurred student loan debt in the course of their undergraduate or graduate careers.
“Now more than ever, college graduates often find themselves bogged down by massive student loan debt,” said Thune. “We should be looking for creative opportunities, like the one Sen. Warner and I have proposed, that would help Americans capitalize on their investments in higher education, enter the workforce, and pursue a career. Our bill would give graduates the flexibility they need to work with employers to secure lower interest rates and pay part of their student loans back tax free. This is an obvious win for graduates, but it also helps businesses attract and retain talented employees.”
Thune and Warner introduced the Employer Participation and Refinancing Act in the 113th and 114th Congress.