In what has been an already busy week for student loan news, on Monday Sens. Mark Warner (D-VA) and John Thune (R-SD) introduced a piece of legislation that would allow pre-tax earnings to go towards student loan payments. The Employer Participation in Refinancing Act is described by the senators as a tool that employers can use to incentivize potential employees and retain those quality workers already in their employ. It also aligns loan repayment with existing employer education benefits like the Employer Education Assistance Program, which allows for pre-tax earnings to finance continued education.
As a condition of this legislation, to be eligible for the pre-tax repayment assistance employees would first need to refinance their loans into the private market. The legislation further directs these lenders to offer borrower protections in the event of financial hardship, but does not go into extensive detail as to the exact nature of those protections.
“Student debt threatens the long-term financial security of too many young Virginians. This bipartisan legislation allows employers to assist their employees in managing and paying down their student debts,” said Sen. Warner in a press release issued to mark the introduction of the legislation.
Publication Date: 6/11/2014