It’s safe to say that 2016 is the year when skyrocketing education costs and a record $1.3 trillion in outstanding student debt have taken center stage among the most urgent issues facing our nation. In his final State of the Union Address, President Obama reiterated his belief that higher education needs to be made more affordable for all Americans, and that we need to find ways to reduce and help manage student debt. He stated that too many young graduates are held back by having to start their adult lives “stuck in the red.”

The good news is that Americans aren’t going to have to wait until after the presidential election to see student loan reform begin to be enacted by our leaders in Washington. In October of last year, Rep. Rodney Davis of Illinois 13^th District sponsored H.R. 3861, The Employer Participation in Student Loan Assistance Act. Along with its companion bill sponsored by Sen. Mark Warner (D-Va.), this bill would extend the tax exclusion that currently applies to employer-provided tuition assistance – up to $5,250 per year – to include employer contributions to employee’s student loan repayment.

Despite today’s highly partisan climate in Congress, the legislation has strong bi-partisan support, with nine Democrats and 11 Republicans as co-sponsors. I recently had the chance to speak with Rep. Davis to discuss his thoughts on the bill and his reasons for sponsoring it. Here’s what he had to say:

Can you please provide a brief overview of the Employer Participation in Student Loan Assistance Act?

The Employer Participation in Student Loan Assistance Act would allow employers to provide a tax-exempt benefit to go toward paying down an employee’s student loan debt, much like they can contribute to an employee’s continued education. An employer could put up to $5,250 per year toward an employee’s student loan debt.

What about your own personal history has inspired you to work on student loan reform/legislation?

My district is home to eight four-year colleges and universities and five community colleges, which adds up to about 150,000 students who I represent in Congress. When I visit these campuses, one of the biggest concerns I hear from students, especially seniors preparing for graduation, is how they’re going to be able to pay back the student loans they’ve acquired while in school.

How would it be taxed?

It would be tax exempt for the employee – meaning this benefit would not be part of your taxable income. The employer would also be able to deduct this benefit from their taxes at the end of the year.

What’s the status of the bill?

It’s in the beginning stages, but we’re gaining more traction and support each day from members of Congress and companies who are either currently offering this type of benefit or those who want to. I recently went before the House Ways and Means Committee to urge them to consider this bill, so hopefully something will come of that soon.

How did the bill come together? What was this impetus for the legislation?

Honestly, Congress and the federal government have offered a similar benefit to employees for some time now and we thought, why not encourage private companies to do the same to help address the growing student debt problem? Student loan debt is now the second highest form of consumer debt – just behind mortgage debt. This is having a negative impact on our economy. Graduates are putting off buying a home or purchasing a car. They’re also not contributing to their retirement, which will be a problem in the long run. This bill isn’t going to solve our growing student debt problem, but it can help. We need more innovative approaches like this one to keep the cost of college down and prevent students from over borrowing.

Will the election year impact the progress of the bill?

I hope not. Unfortunately, Washington doesn’t always move as quickly as I would like, but I’m going to continue to push for this important legislation that is beneficial to not only the graduate with debt, but employers and taxpayers as well.

What can students/employers do to learn more?

Contact me. Visit rodneydavis.house.gov or call my DC office at (202) 225-2371.

Why should Americans care about this bill?

Well, 6 out of 10 people graduating from college now have student debt, so if we have more employers offering this benefit, more graduates will be able to take advantage of it. But this bill is a win for the taxpayer as well. The lower the default rate of borrowers, the less liability to taxpayers. Also, American business owners can use this as a tool to recruit and retain young talent.

How are you inspired by others working to help resolve America’s student debt/fiscal problems?

Something that didn’t get a lot of attention in the media last Congress was the House passed several bills to increase transparency within our higher education system, enhance financial counseling for students and parents, and ensure that colleges and universities have regulatory freedom to innovate to help lower tuition costs. Unfortunately, these bills were never taken up by the Senate. This was a big step in the right direction toward addressing college affordability and I was proud of the work done by my colleagues on the Education and Workforce Committee. I’m also inspired by the work of my colleagues like Congressman Bob Dold (IL-10) who has similar legislation that would also improve 529 saving plans to help more parents save for college.

Did you have student loan debt? If so, how much?

Yes. Not my entire tuition and I don't remember the exact amount but I do fondly remember paying that last payment.

Do your children have student loans?

Not yet.

What was the most important/enriching/beneficial thing about your education? How did it prepare you to be a legislator?

I learned how to work with others to accomplish goals during my college career. Learning and leading not only in the classroom, but also throughout my entire college experience. This prepared me to be a legislator, where listening and working with others is an important part of my job.

If you could go back to college and do it all over, what would you study?

I wouldn't change a thing about my own college experience, but if I went back today, I would study Spanish.

Was there a specific way one or more employer(s) helped give you a leg up in your career?

I was blessed to work for Congressman John Shimkus for 16 years before being elected. He taught me how to put your constituents first and always be able to explain your votes, regardless of how popular they may be. Sometimes, making the right decisions for our country may not be the most politically popular thing to do. It is very cool to be able to serve with him in Congress now.

Thank you for taking the time and for your thoughts.

Thank you.

Instant Insights /

The Employer Participation in Student Loan Assistance Act &ndash; an interview with Rep. Rodney Davis (R- Il.)

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The Employer Participation in Student Loan Assistance Act – an interview with Rep. Rodney Davis (R- Il.)