Gradifi, 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 Davis.
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 employees 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), Gradifis student loan repayment program is used by more than 500 U.S. employers that are making a contribution to pay down an employees 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 bachelors degree “ get out of debt three years faster, saving over $10,000 in principal and interest over 10 years assuming a 4% interest rate.
Gradifis SLP Plan (Student Loan Paydown) is a cloud-based solution that enables employers to make direct contributions to an employees 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. Gradifis College 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. Gradifis 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.
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