A tweak to the tax code could allow employers to pay back employees’ student debt. Two bills making their way through Congress (H.R. 1713 and H.R. 4363) could give companies tax incentives for helping employees repay their student loans.
Currently, if employees receive money from their employers to pay off student debt, it is considered taxable income. The bills aim to expand the tax code, allowing up to $5,250 per year to be treated as nontaxable income.
The average college graduate has $30,000 in debt. Since many young people prioritize paying off debt over saving for retirement, this could be a benefit that employers can use to attract talent. Although the bills are not expected to be passed during an election year, supporters are cautiously optimistic.
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