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Chicago, Ill. - U.S. Congressman Robert Dold (IL-10) today unveiled new legislation, the HELP (Higher Education Loan Payments) for Students and Parents Act, aimed at reducing the enormous $1.3 trillion student loan debt, which has tripled in the last decade. As thousands of students across Illinois are preparing to graduate this spring, Rep. Dold's legislation proposes an innovative plan to reduce the student loan burden on recent graduates, help families pay for college and incentivize employers to take a proactive role in fixing the United States’ student loan debt crisis.
"Sadly, there are students in our community – as young as elementary school – who now believe that because their families don’t have the means to pay, they will never be able to go to college regardless of how hard they work. These are bright, hardworking students who have given up because they believe they’ll just never be able to afford to go to college. That’s unacceptable and must change,” Rep. Dold said. "As the son of a schoolteacher, I’ve always believed that a quality education should be within reach for everybody, regardless of zip code or income. That’s why we’re introducing new legislation, called the HELP for Students and Parents Act, to reduce the burden of student loans and help families pay for college."
The average college student today will graduate more than $30,000 in debt. 40 million Americans are currently paying back student loans, including Rep. Dold and one in every ten other Congressmen. Meanwhile, federal policy continues to fail graduates attempting to gain a foothold in the professional world while being crushed by debt. Millions of young workers are delaying saving for the future because the need to pay off student loan debt is more immediate. In fact, nearly 60 percent of young workers are now opting not to take advantage of employer matching for 401(k) retirement plan contributions.
Rep. Dold’s proposal will reform the federal tax code with an innovative approach to unburden students and families from student loan debt. The HELP for Students and Parents Act modernizes how the tax code treats employer contributions towards student loan repayment to make repaying student loans more affordable for graduates and supports young workers who want this benefit by encouraging employers to offer student loan repayment programs as part of their employee benefit offerings.
Rep. Dold partnered with 1871-based startup Peanut Butter for the announcement. Peanut Butter helps companies provide student loan benefits to attract and retain Millennial employees. Millennials comprise 34 percent of the U.S. workforce and will reach 50 percent by 2020. Statistics show that students are more likely to accept a job and stay longer in that job if their employer offers student loan benefits.
"At Peanut Butter, we’re very excited to support Congressman Dold’s new legislation,” Peanut Butter Vice President of Development Andrew Bordewick said. “The HELP for Students and Parents Act will encourage tens of thousands of companies to join in the student loan debt solution and help relieve millions of graduates of the crushing burden of debt."
Rep. Dold was also joined at the announcement by Amanda Walsh, the former President of the Northwestern Quest Scholars Network and a graduating senior at Northwestern University. Quest Scholars is a national non-profit organization working to help low-income and first-generation college students succeed in college and beyond.
“When I was applying to colleges, I chose Northwestern for one simple reason: I would only have to spend about fifteen years paying off my student loans. Attending the large majority of the other institutions on my acceptance list would have meant, quite literally, paying for my education for the rest of my life,” Walsh said. “Sadly, my story is in no way unique. The student loan crisis disproportionately affects marginalized communities: students who come from low-income households, or who go to community colleges, are more likely to take out student loans, and those students are more likely to struggle paying those student loans back. That’s why this bill is so important. Congressman Dold’s vision will allow students to innovate without fear and to spur change. I thank him for standing by students who need this the most.”
At the same time, Ed Scanlan, CEO of Upright Law, announced that his company would begin providing student loan repayments to its employees. Upright Law has been rated as one of the top 100 digital companies in Chicago and employs more than 100 Illinoisans.
"Today, I'm pleased to announce that, through our partnership with Peanut Butter, UpRight Law will begin to provide student loan repayment to our employees,” Scanlan said. "This program will help UpRight Law to recruit and retain the employees we need to fuel our growth. Nearly two thirds of our employees are challenged by student debt, and we believe we can make a difference in their lives by helping them get out of debt. Congressman Dold's bill will help solve America’s $1.3 trillion student debt problem, and at UpRight Law, we’re committed to doing our part as well.”
While a number of employer benefits receive significant tax advantages in order to facilitate their adoption and use, the tax code does not incentivize employer contributions towards an employee’s student loan repayments in the same way. This disconnect between current law and the priorities of the modern workforce helps explain why, at a time when young workers are clearly in need of student loan repayment assistance, only three percent of companies offer the benefit to employees.
The HELP for Students and Parents Act will:
Help Graduates with Student Loan Debt
- Excludes from income the amount that an employer contributes towards an employee’s student debt repayment (current law recognizes these contributions as taxable income to the employee)
- Provides a tax credit to employers based on the amount contributed towards an employee’s student debt repayment
Help Parents Who Want to Save for Their Children’s College Education
- Excludes from income the amount that an employer contributes to a college savings account (529 plans) that an employee sets up for their child
- Provides a tax credit to employers based on the amount contributed to a 529 plan that an employee sets up for their child’s college education