Warner leads legislation to allow employers to help repay student loan debt

U.S. Sens. Mark R. Warner of Virginia and John Thune of South Dakota, alongside U.S. Reps. Scott Peters of California and Nicole Malliotakis of New York, introduced the Employer Participation in Repayment Act last week.

The bipartisan legislation to help Americans tackle their student loan debt by making permanent a provision that allows employers to contribute up to $5,250 tax-free to their employees’ student loans.

In 2020, Warner and Thune along with Peters negotiated the inclusion of a provision in the CARES Act that allowed the contributions temporarily. Later that year, as part of the government spending package, they secured an extension allowing the benefit through January 1, 2026. By making the tax benefit permanent, the new legislation would provide employees with much-needed relief and employers with a unique and permanent tool to attract and retain talented employees.

“Too many young Americans are struggling under the weight of student debt, preventing them from establishing savings, buying homes, and building wealth,” Warner said. “My Employer Participation in Repayment Act took an important step to help folks pay down their debt while also giving employers a powerful tool to recruit and retain the best talent, but it’s set to expire soon. I’m proud to be pushing to make this benefit permanent so we can grow our economy and support the middle class by supporting recent graduates and employers alike.”

Thune said that giving employers an incentive to help repay student loans was a common-sense step.

“The Warner-Thune bill would permanently equip employers with this unique tool to help attract and retain talented employees while protecting American taxpayers from costly burdens. This is a win-win for graduates and their employers, and I hope it will once again garner strong, bipartisan support,” Thune said.

Peters speaks from personal experience having attended college with student loans when the cost was much lower than in 2024.

“Now, the collective debt among Americans is $1.7 trillion, which limits our economic growth and young people’s economic prospects. Over the last four years, this program has been a huge success — helping employers pay off thousands of employees’ loans and compete for the best talent. This public-private collaboration has proven itself as a cost-effective solution to the student debt crisis and it is imperative that we make it permanent,” Peters said.

According to Malliotakis, the cost to attend college has risen 45 percent in the last 20 years.

“Our bipartisan legislation will allow millions of students and recent graduates to continue receiving reimbursement through their employer up to $5,250 per year tax-free, which can be used to repay student loans, pay tuition, and purchase required books, supplies, and equipment for academic courses. This tax incentive will continue to strengthen our workforce, increase our nation’s competitiveness, and provide much-needed economic relief to millions of Americans who are struggling to make ends meet during this time of record-high inflation,” Malliotakis said.

Reports estimate that Americans owe a combined $1.74 trillion dollars in student loan debt, which is a significant financial burden that not only influences the way the American workforce saves and spends, but also has a stifling effect on the economy. The legislation would update an existing federal program so that it works better for employees living with the reality of burdensome student loan debt.

The legislation has support from numerous educational organizations, as well as the National Association of Realtors®.

“The Employer Participation in Repayment Act is a useful tool in easing the weight of student debt. NAR applauds the leadership from Reps. Peters and Malliotakis and Sens. Warner and Thune in making this change permanent. This legislation creates a win-win for both employers in search of attracting and maintaining talented workers and employees who will receive relief on their debt, enabling them to save money for important life decisions like purchasing a home,” NAR President Kevin Sears said.