a leading provider of student loan and college saving employee benefits,
today announced its support for the Employer Participation in
Repayment Act introduced by Senator Mark Warner, Senator John Thune,
Senator Ed Markey, Congressman Scott Peters, and Congressman Rodney
The Employer Participation in Repayment Act is bipartisan
legislation to expand the employer-provided educational assistance
program to include employer-provided student loan repayment assistance.
The bill would allow employers to offer their employees student loan
repayment assistance up to $5,250 per year and would exclude that
contribution from the employee’s gross taxable income. Currently, when
employers offer student loan repayment assistance to their employees the
benefit is taxed as ordinary income.
A growing number of employers nationwide are seeking to reduce the
burden of student loan debt, which totals more than $1.5 trillion and
impacts more than 45 million Americans. A unit of First Republic Bank
(NYSE:FRC), Gradifi’s student loan repayment program is used by more
than 500 U.S. employers that are making a contribution to pay down an
employee’s student loan debt faster.
“The Employer Participation in Repayment Act is game-changing
legislation that will provide the opportunity of relief for millions of
Americans struggling with student loan debt and will motivate many more
employers to offer a student loan repayment benefit,” said David Chang,
Chief Executive Officer of Gradifi. “Excluding employer student loan
payments from gross income will make this employee benefit more
affordable and has been the missing incentive preventing many companies
from offering this benefit.”
An employer contributing $100 per month would help an employee with
$26,500 – the median amount borrowed for a bachelor’s degree – get out
of debt three years faster, saving over $10,000 in principal and
interest over 10 years assuming a 4% interest rate.
Plan® (Student Loan Paydown) is a cloud-based solution that enables
employers to make direct contributions to an employee’s student debt. It
is one of three workplace solutions from Gradifi to promote financial
wellness by minimizing student loan debt. Gradifi
Refi gives employees immediate access to leading student loan
refinancing lenders with exclusive offers at no cost to the employer.
SaveUp Plan allows employers to make contributions to employees’ 529
college savings plans and ease the stress of paying for college.
“On behalf of Gradifi and First Republic, we thank Senator Warner,
Senator Thune, Senator Markey, Congressman Peters, and Congressman Davis
for reintroducing this bill and continuing to champion employer
participation in student loan repayment,” Chang said. “Allowing
employees to receive a tax-free student loan repayment contribution from
their employers will enable individuals to pay off their loans faster,
saving thousands of dollars in the process. We strongly urge Congress to
move quickly to pass this much-needed, bipartisan legislation and allow
employer-provided student loan benefits to be tax free for employees.”
Gradifi is an innovator in employee benefits for U.S. employers.
Gradifi’s mission is to help employers build loyalty with their
workforce by providing employee benefits that positively impact their
employees’ financial well-being. Gradifi offers an all-in-one,
cloud-based platform that allow employers to offer employees student
loan refinancing opportunities, and employer-sponsored contributions to
student loans and 529 college savings plan accounts. A unit of First
Republic (NYSE:FRC), Gradifi works with employers of all sizes
across the U.S. www.gradifi.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190212005981/en/