Student loan debt currently hovers around $1.5 trillion dollars. Right now, there are 44 million Americans, mostly millennials, who are fighting for their financial lives. Student loan debt is #2 nationally, second only to mortgage debt. According to the experts, this much debt is going to seriously harm the economy, if it isn’t already.
Desperate for help, many of these students are begging the government to come up with a solution. In fact, many candidates promise to make college free or even offer full loan forgiveness. On the other hand, the government says it’s not fair to the taxpayers. If someone takes out a student loan, they should be required to pay it back.
That leaves lawmakers trying to figure out other solutions. A new idea is being floated around Congress and the Senate that is gaining support from both houses. It would allow employers to make tax-free contributions to their employee’s student loan debt problem. The amount could equal as much as $5,250 every year.
“That takes an existing legislation and just makes a slight tweak to make it the cover the cost of taking class or covering a student loan,” said Mark Kantrowitz, president and vice president of research at Savingforcollege.com. “That might be an elegant way to do this.”
A Student Loan Problem
Bills like this have been proposed before. More people are looking to the government to help with their student loan problem. That means lawmakers are listening and are at least proposing helpful solutions. If they don’t come up with something soon, it’s going to become a major detriment to the U.S. economy.
If you graduate college with massive piles of debt, it’s difficult to get by. By the time a person pays rent, utilities, and buys food, there’s not much left. What we’re seeing as a result of this problem are people entering their 30s with virtually no savings. Many people are also skipping out on health insurance because they simply can’t afford it.
Student loan debt is already impacting the economy in several ways. If you have a new generation upcoming who can’t afford to buy things, it’s going to struggle. Millennials are putting off major life decisions and it’s hurting several industries. They’re waiting to get married, have children, buy houses, and more.
It’s getting to the point where young people are regretting going to college. They often don’t feel it was worth the immense amount of debt. It many cases, it can take 10-20 years to fully pay off. With stagnant wages and the rollercoaster economy, the situation will only get worse.
Tax Exemption Help
Because student loan debt is such a major problem, it’s going to take more than one solution to solve it completely. “Paying off student debt is something all of America is going to decide to get aggressive on and go after. It’s a huge number. We can only hope to contain it and hope to get it down,” said Aaron Pottichen, president of Texas-based CLS Partners.
http://financialhelpers.com/student-loan-payments-may-soon-be-taken-from-your-pay/
Lawmakers are hoping that more employees will consider offering these types of benefits. Surely, if there’s a tax incentive for companies, they will be more likely to sign on. It’s also a great recruitment and retention tool for businesses. It’s expected that this bill will pass hopefully in the next few months.
“Republicans love tax cuts, and Democrats love making college more affordable,” Kantrowitz said. “This fits in the center of their Venn diagram.”
