Congresswoman Lori Trahan Introduces Legislation To Ease Burden of Student Loan Debt
Washington, DC – Today, Congresswoman Lori Trahan (D-MA-03), along with 100 of her colleagues, introduced a bipartisan bill to provide much needed relief to young people struggling with student loan debt. The bill would provide financial assistance to Americans struggling to pay off college debt by making employer-provided student loan payments tax exempt up to $5,250 a year—similar to tax exemptions for tuition assistance programs.
“As the first person in my family to graduate from college, I would not have had many of the opportunities as a Congressional staffer and businesswoman afforded to me if I had left college with overwhelming student loan debt,” said Rep. Trahan. “Crushing student loan debt impacts our entire economy. It can prohibit bright young talented people from taking entrepreneurial risks that could benefit them, and the economy. Congress can and must do more to alleviate the student debt crisis. This legislation allows businesses to offer a new employer benefit to help their employees pay-off their student debts, and is an important step in what must be a comprehensive approach to this issue.”
Section 127 of the Internal Revenue Code allows employers to voluntarily provide tax free education assistance to their employees. Employees are able to exclude from income up to $5,250 per year in assistance for any type of educational course at the undergraduate, graduate or certificate level. However, current law does not allow pre-tax contributions for individuals who already have incurred student loan debt in the course of their undergraduate or graduate career. The Employer Participation in Student Loan Assistance Act would provide employers with the flexibility to offer employees assistance towards their student loans up to $5,250 per year.