Over the past few days in Washington, D.C., a bi-partisan group comprising 20% of the members of the U.S. Congress introduced the Employer Participation in Repayment Act. If passed, the legislation will save companies approximately 10% of the cost of offering Student Loan Repayment, allowing employers to make pre-tax contributions toward student loans by expanding the Section 127 exemption that currently allows companies to make pre-tax tuition payments.
Illinois Congressman Danny Davis visited Peanut Butter to learn about our efforts to help employers offer Student Loan Assistance.
Momentum continues to build in Congress for legislation that can help millions of workers with student debt and their employers.
National student Loan debt is $1.4 trillion with an 11.2% delinquency rate. Studies show that the American dream is delayed for many young workers relative to previous generations because of student debt – home purchasing is delayed; retirement savings is delayed; and quality of life is impacted.
Midwest states Illinois, Wisconsin, South Dakota, Iowa, Michigan & Minnesota are all among the top half of states in the country with high student-loan indebtedness according to a study published in 2016 by WalletHub. One Minnesota State Senator Jeffrey Miller recognized how much recent college grads are struggling, noting: “[Policy leaders are] always looking for ways to make higher education more affordable, but we should also work to help the folks who have already been through college and are struggling to pay back their student loans.”
Federal legislators are working with Peanut Butter to develop and advance legislation that provide incentives to employers that assist workers with student debt.
There are few things on which the political parties agree these days, which leaves struggling the 44 million americans holding $1.4 Trillion in student loan debt. It was therefore a rare moment of bipartisanship last month when Republican Rodney Davis of Illinois and Democrat Scott Peters of California joined together in the U.S. Capitol to introduce the Employer Participation in Student Loan Assistance Act, which creates tax advantages for employer participation in student debt assistance.
Peanut Butter CEO David Aronson joined U.S. Reps. Rodney Davis (R-Ill.) and Scott Peters (D-Calif.) at a press conference to announce their bill, H.R. 795, the Employer Participation in Student Loan Assistance Act, to help address rising student debt. The proposed legislation engages private employers and encourages them to offer a tax-free benefit to put toward an employee’s student loan debt, similar to the existing tax benefit for tuition assistance.
The staggering $1.3 trillion national student loan debt crisis is gaining momentum in national, state, and local politics alike. Many states are already in the process of reviewing prospective programs that will ease the burden on recent graduates in hopes that its cities will retain graduates who offer innovation, spending, and tax dollars.
In the afternoon of Friday, May 13 Peanut Butter visited the Chicago office of US Senator Dick Durbin. Peanut Butter CEO David Aronson provided an overview of Peanut Butter as a company and the services we provide that enable companies to offer a valuable student loan repayment benefit to their employees. Aronson also highlighted the results of the Millenial Benefit Preferences Study which found that offering student loan repayment can help companies attract top talent, reduce costs through faster hiring and longer employee retention, and is especially appealing to women and minority employees.
At first glance, it may seem that the student debt crisis is a somewhat limited problem, only affecting college-educated Millennials and companies trying to recruit them. Unfortunately for everyone, this is not the case. True, the student debt “only” affects about one-in-eight Americans (roughly 40 million people, disproportionality Millennials), but everyone feels its 1.3 trillion dollar impact. How? Well, there are two main reasons—decreased consumer spending, and decreased investment, both which are significantly affected by the massive about of student loan debt. In this fairly short blog post, I hope to give you an idea of why this is the case.
Student loan debt affects not only individuals but also national and local economies. Different states are also trying to find ways to help more than 40 million people who struggling with student loans. New York, Illinois, and California have already made their steps toward reducing a debt burden, and Peanut Butter's study helps them to make it.
Today, Peanut Butter and 1871 will host Congressman Robert Dold (IL-10) as Dold introduces new legislation to the U.S. House of Representatives. The HELP (Higher Education Loan Payments) for Students and Parents Act is aimed at reducing the student loan burden on recent graduates, helping families pay for college and incentivize employers to take a proactive role in fixing the United States’ student loan debt crisis.
I wrote in a previous blog that Peanut Butter sat down with Congressman Rodney Davis (R, IL - 13) to discuss a bill he sponsored that would enable companies to make tax-free contributions towards their employees' student loan repayment. On April 4, 2016 Congressman Bob Dold Jr. (R-IL 10) visited 1871, Chicago's hub for tech startups and entrepreneurs, to meet with Peanut Butter and share his perspective on solutions for the student loan debt crisis.
Congressman Rodney Davis (R, IL-13) visited 1871, Chicago’s entrepreneurial hub for tech startups on March 4, 2016 to meet with Peanut Butter CEO David Aronson. The topic of the meeting was student loan debt in the US, and potential solutions for the $1.3 Trillion debt crisis. Davis is sponsoring a bill in congress, HR3861: Employer Participation in Student Loan Repayment Act, that would make it easier for companies to help employees pay off their student loans.