A college education should lead graduates down the path of financial security and independence.
Unfortunately, many students find themselves drowning in student debt when they graduate.
According to the personal finance website, Make Lemonade, over $1.5 trillion in student loan debt is owed by more than 44 million borrowers in the U.S. -- an average of about $40,000 owed per student. Many college graduates, working entry level jobs, struggle to make their student debt payments.
Small businesses are also impacted by the whopping student debt owed by prospective employees.
While some businesses may offer job applicants assistance with their student loans, many smaller companies do not have the capacity to provide such a benefit. This makes it more difficult for smaller businesses to compete for talented professionals.
Legislation is pending in the U.S. House of Representatives that will help college graduates reduce their student debt, while providing small businesses the opportunity to attract talented employees.
H.R. 795 allows businesses to contribute $5,250.00 annually to bring down their employees' student debt without the payments being considered taxable income. Employers are also able to deduct the contributions.
Businesses can already provide this same benefit to their employees enrolled in educational courses at the undergraduate, graduate or certification level. Extending this benefit to those who have already graduated from college will help many employees tackle the debt associated with their education. It will also provide them the flexibility to put more of their income back into the economy.
H.R. 795 has tremendous bipartisan support.
There are 127 co-sponsors on the bill, including much of the Illinois congressional delegation, and a companion bill in the Senate. During these polarizing times, elected officials from both sides of the aisle have come together to support this common-sense legislation because empowering new college graduates and supporting small businesses are not partisan issues.
Survey a room and almost everyone will acknowledge they, or someone they know, struggles with student debt. The challenge facing this legislation is making its passage a priority for politicians. A robust grass-roots effort, fueled by all those with a stake in the bill's passage, is necessary to encourage Congress to move H.R. 795. Critical mass and activating the robust networks of all stakeholders is required.
Business organizations and those dedicated to empowering recent college graduates must form a strong coalition, contact legislators and strongly encourage their engagement. This issue is too important for advocates to accept lip-service from politicians. To the contrary, a robust coalition must compel elected officials to engage on this legislation with the same tenacity they exhibit on partisan issues.
Student debt touches so many people in a direct and profound way. Making H.R. 795 the law of the land is good for college graduates, the small business community and the nation's economy.
Politicians in Washington should pass this important legislation.
• Elliot Richardson is president and co-founder of the SBAC.