SLSTEAA Case Studies

Dear Colleague:

As we consider the Student Loan Support Through Employer Aid Act (SLSTEAA), I would like to bring to your attention two key issues as the issues relate to the rising cost of higher education and private or public businesses role in higher education.

As you know, the cost of higher education has steadily risen through the years and students are going into increasingly more debt to finance their education. Furthermore, most students must maintain a job to defray the cost of living, especially if their family can not help them monetarily.

With an increase in students working and the cost of higher education rising, businesses have stepped up to help pay for some of the education costs of their employees, however, the amount business can pay without reporting it on the employee’s income under the tax code is $5,250. $5,250 is hardly a dent in most student’s education expenses but it does provide some help. In addition, current tax code does not allow for businesses to pay directly on an employee’s student loans.

SLSTEAA would allow business to pay directly on an employee’s student loans and increase the amount a business could give to a student employee for education expenses without reporting it as income to $9,000.

Such an increase and allowing businesses to pay directly on student loans, would not only incentivize more students to work and keep current students working during their college careers but incentive more business to offer programs to pay an employee’s education costs. Even further, students who are currently already apart of these programs businesses offer would benefit from the increase. I hope you that will consider SLSTEAA will take into consideration the rising cost of education and how limited business are in helping their student employees under current

law.

Sincerely,
Rep. Ryan Costello (PA-6)

H.R. 795

To amend the Internal Revenue Code of 1986 to further include employer provided educational assistance to employer payments of educational loans.

IN THE HOUSE OF REPRESENTATIVES
March 3, 2017

A Bill
To amend the Internal Revenue Code of 1986 to further include employer provided educational assistance to employer payments of educational loans.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.

This Act may be cited as the “Student Loan Support Through Employer Aid Act”.

SEC. 2. EXCLUSION FOR EMPLOYER PAYMENT OF QULAIFIED EDUCATIONAL LOANS.

(a) IN GENERAL.—Section 127(c)(1) of the Internal Revenue Code of 1986 is amended by inserting after subparagraph (A) which says “the payment, by an employer, of expenses incurred by or on behalf of an employee for education of the employee (including, but not limited to, tuition, fees, and similar payments, books, supplies, and equipment), and” the following new subparagraph:

“(B) the payment by an employer, whether paid to the employee or to a lender, of principle or interest on any qualified educational loan incurred by the employee, and”.

(b) $5,250 Maximum Exclusion.—Section 127(a)(2) of the Internal Revenue Code of 1986 is amended by changing the maximum amount of educational assistance provided by an employer excluded from gross income of an employee to $9,000 during a calendar year.

(c) DENIAL OF DOUBLE BENEFIT.—Section 221(e)(1) of such Code is amended by inserting before the period at the end the following: “, or for any amount which is excludable from gross income under section 127(c)(1)(B)”.

(d) EFFECTIVE DATE.—The amendments made by this section shall apply to payments made by employers after December 31, 2017.