Companies like PricewaterhouseCoopers, Natixis Global Asset Management, and Fidelity Investments have recently begun helping their employees pay down their student loan debt. While this new job benefit has become a popular incentive to attract millennial employees, the contributions to student loans are considered taxable income.
On Thursday, Reps. Elise Stefanik (R-N.Y.) and Luke Messer (R-Ind.) introduced a bill that would allow employers to make tax-free payments towards their employees’ student loans. The process would be similar to tax-free employer contributions to 401(k) plans, with an annual maximum payment of $10,000.
The idea came from a PricewaterhouseCoopers representative who attended the Republican Policy Committee Millennial Task Force hearing on college affordability in April.
The proposal is likely to be well received among students and recent graduates, who currently hold an average debt of about $30,000 each. In a survey by Iontuition, more than half of those with loans said they would rather their employer provide loan help than a health plan, and nearly half preferred loan help to a 401(k).
“Overwhelming student loan payments are holding millions back from buying homes, starting families and saving for retirement,” said Congresswoman Stefanik in a statement. “My bill would provide graduates and our next generation workforce with a powerful tool to pay off student loans faster while starting their careers.”
Stefanik told The Post-Star the benefit could also serve as a valuable recruitment incentive for employers to attract highly skilled workers.
The bill — Helping Employers Lessen Payments for Students (HELPS) Act — has been referred to the House Ways and Means Committee, as well as the Congressional Budget Office to analyze its economic impact.