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Rep. Stivers and Rep. Rice Reintroduce Bills to Address the Student Loan Debt Crisis

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Washington, February 8, 2021 | comments

WASHINGTON, D.C. – Last week, Representative Steve Stivers (R-OH) and Representative Kathleen Rice (D-NY) reintroduced two bills to reduce student loan debt and to help borrowers keep more of their hard-earned paychecks.  Rep. Stivers’ Decreasing Employees Burdensome Taxes from Student Loans (DEBT) Act and Rep. Rice’s Student and Families Empowerment Act both gained strong bipartisan support in the 116th Congress.

“For some students in Ohio’s 15th, pursuing their dreams means pursing higher education, but too often the cost is prohibitive, or it results in tens of thousands of dollars of debt,” said Rep. Steve Stivers.  “I know how stressful the cost of higher education can be.  One of the reasons I joined the Ohio Army National Guard was to help pay for my undergraduate degree at Ohio State.  With help from these bills, students who are eager to create the next big thing, to innovate and advance our nation, won’t have to shy away from education due to the rising costs of attendance or the potential to be hamstrung by debt throughout their professional careers.”

“Far too many of our nation’s college graduates are being crippled under the weight of their student loan debt,” said Rep. Kathleen Rice. “This crisis has gone on unchecked for far too long, burdening recent graduates and their families in New York and across the country.  The two bills I am introducing with Representative Stivers will make it easier for student loan borrowers and their families to quickly pay off student loans.  These are bipartisan, commonsense changes we can make to provide immediate financial relief to our college graduates.”

The DEBT Act, H.R. 902, encourages employers to contribute up to $10,000 per year to their employee’s student loans as a non-taxable benefit.  Ultimately, this allows student borrowers to keep more of their paychecks and helps businesses recruit and retain talented employees in the workforce. 

The Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Consolidated Appropriations Act incorporated a portion of this bill to allow employers to temporarily make direct, non-taxable payments to help employees repay their student loans up to $5,250.  Student debt is a driver in delaying personal investments like purchasing a home for the first time or investing in retirement.  Involving the private sector is one solution that gives employers an incentive to attract top talent, keeps the government from adding trillions in interest accumulation to an already out-of-control national debt, and helps borrowers take control of their financial future.

Rep. Rice’s Students and Families Empowerment Act, H.R. 891, will implement four common-sense solutions to ease the burden of interest for student loans.  First, this bill removes the current $2,500 cap on deductions for student loan interest and applies the same treatment that home mortgage receives allowing all interest to be deducted on loan amounts up to $750,000.

H.R. 891 also eliminates current income limits on who can claim student loan interest deductions.  Many students seeking graduate and advanced degrees have no choice but to take on additional loans as they seek advanced skills.  These same students often earn higher salaries upon graduation commensurate with their advanced training, but are excluded under current law from the benefit of interest deductibility.  This bill allows individuals earning more than $80,000 annually ($165,000 for couples filing jointly) to take these deductions on their taxes.

Lastly, this bipartisan bill will give parent borrowers (who often do not receive a grace period) and recent graduates twelve full months, instead of six, to begin making payments on their federal loans and ensures interest does not accrue during this period.

Rep. Stivers and Rep. Rice share the common goal of making sure that student loan debt does not hinder students’ desire to seek out advanced training or hamstring Americans who would rather be reinvesting their paychecks into buying their first home, establishing life savings, and investing in their future.  44.7 million Americans carry student debt, owing more than $1.5 trillion. Tackling student loan debt is critical in the effort to rebuild our economy, and these bills illustrate the bipartisan desire to provide real solutions for students and borrowers.

Find H.R. 902's bill text here.

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