Midwestern states of Illinois, Wisconsin, South Dakota, Iowa, Michigan and 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.”
Minnesota State Senator Jeffrey Miller has a bill to help employees struggling with student debt
Almost all industries, including pharmaceutical, technology and health care, are facing fierce competition to attract and retain recent college graduates and millennial workers. Studies are showing that many of these young workers are attracted to employers who offer student debt assistance as an employee benefit. For example, the Millennial Benefit Preferences Study commissioned by Peanut Butter found that, when employers offer student debt assistance, younger workers are 85 percent more likely to accept a job and will stay 36 percent longer with that employer. And 76 percent of recent college grads who responded to an American Student Assistance survey (see the study results at page 29) agreed that, “all other things being equal, their choice to take a job would be considerably impacted or decided based on an employer’s willingness to offer a student loan repayment program.”
Recognizing the vibrancy and economic growth young college educated workers can bring to local communities and cities, leading state legislators are advancing legislations that will encourage businesses in their states to offer student debt assistance designed to drive more millennials to move to their states after graduation.
H.1480, An Act Promoting Student Loan Repayment, introduced by Republican Rep. Kate Campanale, would permit a tax credit on contributions of employers made to the student loans of an employee of up to $4,500. The funds received by the employee for student debt repayment would not be considered taxable income by the state.
H 1579- An Act Relative to Employer Student Loan Contribution, introduced by Democratic member Rep. Paul Mark, permits a tax deduction of up to $3,600 matching the contributions of employers made to the student loans of an employee, and the funds received by the employee from the employer for student loan repayment will not be considered taxable income by the state.
S 1516- An Act Encouraging Employer Student Loan Repayment, introduced by Democratic Senator Eileen Donahue, permits a tax deduction not to exceed $2,000 for contributions of employers made to the student loans of an employee.
SF 941 was introduced by Republican State Senator Jeremy Miller. It allows a refundable tax credit of up to $1,000 for people paying more than 10 percent of their income to student loans. In a press release, Senator Miller said the refunds are estimated to save debtors $37.2 million in 2018 and $38.1 million in 2019.
HF 20, introduced by Republican State Rep Greg Davids, would make higher education students eligible for a $500 or $1,000 tax credit towards student loan and interest payments.
S165 / HF365, introduced by Senator Greg Clausen in the Senate and Rep. Jon Applebaum in the Assembly, both Democrats, would give a tax credit of up to $5,000 per year for people paying their student loan debts.
HB 239, introduced by Republican Bill Harris, would create an employer tax credit for certain amounts contributed towards an employee’s student debt obligations.
Connecticut legislators requested a $150,000 earmark to fund a pilot program that would help employers and employees tackle outstanding student debt.
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Peanut Butter can also help if you would like to see your business or employer offer student debt assistance as an employee benefit. GET STARTED HERE