Tuition.io praised the U.S. Congress for passing the coronavirus stimulus bill which includes a tax break for student loan payments made by employers. As part of the bill, employers will be able to make tax-free payments towards their employees’ student debt through the end of the year.
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“We applaud the government stimulus bill for including a provision on income tax exclusion for individuals who are receiving student loan repayment assistance from their employer,” stated Scott Thompson CEO, Tuition.io. “Providing a tax subsidy for employer student loan repayment doesn’t just benefit individual workers, it will help reduce a major drag on the overall economy as we recover from the COVID-19 shock. Even if only temporary, this groundbreaking legislation will enable companies large and small to help America’s working people make it through this historical crisis.”
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The burden of student loans has topped $1.6T, with the average individual holding nearly $30,000 of debt. Before the COVID-19 pandemic hit, the effect on borrowers was profound with many putting off major life milestones such as saving for retirement or buying a house. In 2019, more than 11 million Americans were past due or in default on a student loan. The impact of COVID-19 on the economy has been swift and unprecedented, further stifling workers and employers who were already feeling the pressure of financial stress.
Tax relief for employer-sponsored student loan repayment was introduced by Representatives Rodney Davis (R-IL) and Scott Peters (D-CA) and Senators Mark Warner (D-VA) and John Thune (R-SD) as the Employer Participation in Repayment Act. The legislation had strong bipartisan support and applause from those in the industry looking to help their employees repay their student debt.
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