Congress can help bring student debt assistance to small business employees & lower income workers

National student Loan debt is $1.4 trillion with an 11.2 percent 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 delayedretirement savings is delayed; and quality of life is impacted.

Studies show that young workers, especially, desire student loan assistance versus more traditionally-offered benefits like retirement and insurance contributions:

o   76 percent of respondents with student debt said that “all other things being equal, if an employer offered assistance with student loan repayment, it would be the deciding factor or have considerable impact on their choice to take that job,”  (See page 16 of this 2015 ASA Report), and

o   College-educated millennials prefer student loan assistance repayment two to 12 times more than other perks and benefits, according to the Millennial Benefit Preferences survey (see page seven of the Millennial Benefit Preferences Study)


Yet, there is a huge mismatch between employee demand and supply of these benefits as only about four percent of companies presently provide student loan assistance; and today it is generally limited to the larger companies in the most competitive industries.  This leaves behind all of those workers in smaller businesses that help drive forward our economy.

Legislative proposals seek to provide tax incentive for employers to participate in the paying of student debt of their employees, where these contributions are currently treated as taxable income (see Employer Participation in Student Assistance Act H.R. 795/S 796).

If enacted, these bills would normalize student loan repayment benefits leading to ubiquitous adoption of by employers, similar to how defined benefits contributions rapidly went from obscure to ubiquitous after congress enacted 401(k) tax preferred benefits in 1978.

More workers, particularly lower income workers and workers at smaller organizations, would gain access with greater employer adoption of student loan assistance, and we’d do more together as a country to resolve the nation’s $1.4 trillion student debt problem.

This is critical because lower income workers and workers who did not complete their degree are relatively more likely to default on their student loan obligations, so defaults across the country will be reduced if employers are participating in the monthly debt payment of more lower income workers.

Leading companies are not waiting for Congress to offer student loan assistance for their employees.  If you would like the business you own or work for to offer these benefits, GET STARTED by clicking here!