As student loan defaults rise at a double-digit pace, a bill recently introduced in the U.S. House of Representatives seeks to grant favorable tax status when U.S. companies provide money to help employees pay off student loan debt.
H.R. 795, the Employer Participation in Student Loan Assistance Act, would amend the federal tax code to allow businesses to make up to $5,250 in tax-free yearly contributions toward workers’ student loan payments. This would give them the same tax status as annual tuition reimbursements; contributions of up to the same amount for tuition are already tax free under Section 127 of the tax code.
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