U.S. Sens. Mark R. Warner (D-VA) and John Thune (R-SD) have introduced the bipartisan Employer Participation in Refinancing Act (S.2429) to help individuals pay down their student loan debt.
The Warner-Thune legislation would provide a new tool to help employers recruit and retain quality employees by allowing them to help qualified employees repay student loans with pre-tax dollars. Currently, the Employer Education Assistance Program allows employers to contribute pre-tax earnings to help employees finance continued education, but does not allow relief for individuals who already have incurred student loan debt in the course of their undergraduate or graduate careers.
“Student debt threatens the long-term financial security of too many young Virginians,” Senator Warner said. “This bipartisan legislation allows employers to assist their employees in managing and paying down their student debts. Additionally, it provides a unique new tool to help Virginia companies attract and keep talented employees. This is a win-win.”
“Students should have a choice when it comes to financing their education,” said Senator Thune. “Rather than locking students into high-interest loans with the federal government, our bill would allow students flexibility to work with private companies to secure lower rates and pay part of these loans back using pre-tax dollars. This is a winning solution for students and businesses alike. I hope our colleagues will join us in moving this important legislation forward.”
To be eligible for this loan assistance program, employees with student loan debt must refinance their loans into the private market, which in some instances will allow the student to take advantage of lower interest rates available than what is currently offered by the federal government. Borrowers will be offered protections in the event of financial hardship.
Senator Warner recently introduced a package of legislative proposals to help make higher education more affordable for Virginia families. It includes bipartisan legislation to provide greater transparency to help students and their families make more informed college and career decisions, legislation to strengthen career and technical education programs by more closely linking local job training programs with today’s job openings, a proposal to make income-based Pell Grants available to qualified high school students so they can begin taking college-level courses sooner, and legislation expanding opportunities for borrowers to repay student loans based on their income.
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Chris Graham
