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State Rep. James Arciero recently testified before the Joint Committee on Revenue regarding a bill he proposed to assist recent graduates on the repayment of their student loans.
“I often hear of the effects of massive student debt on young people entering the workforce. I am always mindful of the fact that college debt constitutes the second highest source of personal debt, eclipsed only by home mortgages,” said Arciero, who serves as the House Vice Chairman of the Joint Committee on Higher Education.
Arciero’s proposal, House Bill 2391: An Act Encouraging Employer Student Loan Repayment, seeks to incentivize employers to assist recent hires in the repayment of their loans. Specifically, the bill would provide a $2,000 a year tax credit in exchange for the payment of $2,000 toward the principal of an employee’s student debt.
According to a study by Fidelity in 2017, it is estimated that 44 million Americans collectively owed over $1.5 trillion in student debt, which is on track to double by 2025. The research indicated that the average student loan debt was $37,172 per graduate. Such debt early in life can negatively impact the ability of these young adults to purchase housing, start a family or contribute to a retirement plan, which strains the overall economy.
While only 4 percent of companies have such a program currently, Arciero said he is hopeful that this bill, if passed, would greatly increase the establishment of such a benefit which would be a win-win to both the employer and employee.
“I believe a student loan tax incentive program would serve as a strong incentive for the attraction and retention of employees, while at the same time tackling the issue of rising student debt in an economically feasible manner,” said Arciero.
The legislation is the result of a statewide tour of an ad-hoc Commission on Student Debt created under the auspices of the Joint Committee on Higher Education in 2017. The commission was charged with studying the impact of student debt on graduates and their families, and ways to assist students to manage this expense. The hearings involved testimony from many state college and university administrators, faculty and students to determine the best ways that public higher education institutions could improve higher education opportunities for Massachusetts students. A central finding of the tour was the need for a reduction in a student’s debt amount, so that more students could afford to attend a college or university.
“It is fundamentally unfair to strap students with huge amounts of debt when they are trying to start their adult lives. I am hopeful that with commonsense changes in the law, we can implement incentives to make Massachusetts the state they want to live in, work in, and raise their families,” concluded Arciero.