King Cosponsors Bipartisan Legislation to Help Ease the Burden of Student Loans

September 24, 2024
WASHINGTON, D.C.— U.S. Senator Angus King (I-ME) is cosponsoring bipartisan legislation to help college graduates reduce the burden of student loans through a tax-free employer contribution. TheEmployer Participation in Repayment Actwould permanently extend a provision of the Internal Revenue Code allowing employees to exempt up to $5,250 from tax annually in student loan repayments that employers contribute on their behalf. The original provision was included in the bipartisanCARES Actand later extended through January 2026. Before the expansion of the provision, employers were only allowed to contribute toward continuing educating — not student loan repayments — in a way that is tax-free to the employee. The bill’s original sponsors are Senators Mark Warner (D-VA) and John Thune (R-SD).
“Student loans are an essential financial tool to help people in Maine and across the nation access and afford higher education,”said Senator King. “However, as we seek to tackle the cost of living in America, if we can cut costs for college graduates, those extra dollars can help them afford apartments, cars or even set aside savings. The bipartisanEmployer Participation in RepaymentAct is a commonsense step forward to ease the burden of student loan debt, while also creating a valuable recruiting and retention tool for employers. It’s not just smart policy, it’s a win-win for Maine workers and businesses.”
According to areportfrom Federal Student Aid, an office of the Department of Education, it is estimated that Americans owe a combined $1.74 trillion dollars in student loan debt. This debt 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. TheEmployer Participation in Repayment Actwould update an existing federal program so that it works better for employees living with the reality of burdensome student loan debt.
From day one in the Senate, Senator King hasadvocatedfor student loan borrowers, working to ease the heavy debt burden that impacts thousands of Maine people. Earlier this year, he joined his colleagues inurging Education SecretaryMiguel Cardona to consider a pause for student loan borrowers who are nearing their final payments during the Department’s transition to additional student loan servicers. In April 2019, Senator King joined Senators Coons and Portman to introduceDomenic’s Law, bipartisan legislation which would allow a parent whose child develops a total and permanent disability to qualify for student loan forgiveness. Afteran alarming report in 2019 fromNational Public Radio (NPR)which found that hundreds of thousands of Americans with qualifying disabilities have not received the student loan relief they are entitled to by law, Senator King joined a bipartisan group of Senate colleagues in sending a letter to the U.S. Department of Education urging the Department’s Acting Inspector General, Sandra Bruce, to investigate the federal student loan discharge process for Americans with total and permanent disabilities (TPD).
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