Members of Congress are beginning to line up behind a new effort to provide tax relief for employer-sponsored student loan plans. Here at GradFin, we are very pleased to see the positive feedback across the aisle. Republicans and Democrats - in the House and Senate - have lined up to support this legislation. We are eager to work with Congress to pass this legislation into law soon, and this will benefit many Americans who are burdened by student loans.
Here's the latest. Take the time to tweet your Congressman if they have already stood up to support this effort.
New York Congressman Introduces Employer Student Loan Bill
On June 3rd, Steve Israel, a Democratic Member of Congress from New York, introduced a bill in the House called "the Student Loan Employment Benefits Act of 2016". This legislation, H.R. 5382, would amend the Tax Code to provide a $5,000 per year per employee tax exclusion for any student loan payments they receive from their employer.
Ways and Means Member Bob Dold Takes Action and Rodney Davis Continues to Get Cosponsors
The House On May 11th, Congressman Robert Dold (R-IL) introduced the HELP for Parents and Students Act of 2016. This legislation, H.R. 5191, provides a tax exclusion of $5,250 per year per employee that receives student loan payments from their employer. In addition, the legislation offers a tax credit to employers that provide student loan benefits to their employees. This legislation is the most far reaching so far because it would provide tax benefits to the employer and the employee.
The Dold legislation has 3 cosponsors - Congressman Tim Ryan (D-OH), Congressman John Carney (D-DE), and Congressman Will Hurd (R-TX). Importantly, Congressman Robert Dold serves on the House Ways and Means Committee and is pushing his colleagues on the committee to pass the bill this year. The House Ways and Means Committee has jurisdiction over tax laws and Dold's leadership in the Committee is crucial to pushing the bill through.
Congressman Rodney Davis, who launched his efforts in October on bipartisan legislation (H.R. 3861), is continuing to press his case. The Rodney Davis legislation, which is similar to the other bills in that it provides a tax exclusion for employees of up to $5,250, now has 27 cosponsors. The list is growing by the month, and we are very excited to see a number of Republicans and Democrats support this effort.
Senate Bill (H.R. 2457) Gains 2 New Cosponsors
The Senate companion legislation (S. 2457), introduced by Senators Mark Warner (D-VA) and John Thune (R-SD), gained two new cosponsors. Senator Angus King (I-ME) and John Tester (D-MT), joined the bill in the past month, making this a strong bipartisan effort with 3 Republicans (Thune, Ayotte, and Capito) and 3 Democrats (Warner, Tester, and King). GradFin is calling this the Gang of Six in the Senate and we are hopeful these Members in the Senate can help push this into law. The legislation is similar to other efforts in that it creates a $5,250 per employee per year tax exclusion for employer-sponsored student loan payments. The most encouraging part about the Senate bill is that the leaders (Mark Warner and John Thune) are very powerful Members of the Senate Finance Committee.
GradFin encourages the House Ways and Means Committee to take up this legislation this year. It is a requirement that all tax legislation must start in the Ways and Means Committee and having them on board would be critical to our efforts. The Committee has about three weeks before Members of Congress leave for the Republican and Democratic Presidential Conventions. There is still time to pass these bills out of the Committee which would be a great step forward to creating this new market for employer-sponsored student loan benefit plans.
GradFin also encourages YOU, companies and employees to discuss these bills with their Member of Congress and U.S. Senator. There are 5 months between now and the election. We need to make sure the people that are elected in November are hearing your calls to support this legislation.
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