Your current web browser is outdated. For best viewing experience, please consider upgrading to the latest version.

Donation - Other Level

Please use the quantity box to donate any amount you wish. Sign Up to Donate

Contact

Send a question or comment using the form below. This message may be routed through support staff.

Email Article

Password Reset Request

Register


Add a topic or expert to your feed.

Following

Follow Experts & Topics

Stay on top of our work by selecting topics and experts of interest.

Experts
Topics
Project
On The Ground
ERROR
Main Error Mesage Here
More detailed message would go here to provide context for the user and how to proceed
ERROR
Main Error Mesage Here
More detailed message would go here to provide context for the user and how to proceed

Manhattan Institute

search
Close Nav
Share this commentary on Close

New Student Loan Reform Plan Sounds Good, but Would Only Bleed Taxpayers Even Drier

commentary

New Student Loan Reform Plan Sounds Good, but Would Only Bleed Taxpayers Even Drier

Washington Examiner June 9, 2017
EducationHigher Ed

There are solutions out there that both "sound good" and do good. This isn't one of them.

Making employer-provided student loan repayment benefits exempt from federal taxes is the newest scam in student lending. But rather than the borrowers being the victim, this time it's the taxpayers.

There's been growing support behind the idea that when employers help students repay their student loans those benefits should be exempt from taxes, both for the employer and employee. Right now, there are two bills in the House that would create this tax break.

The first, which was introduced by Reps. Rodney Davis, R-Ill., and Scott Peters, D-Calif., even has bipartisan support. The idea, of course, is that this policy change, while creating a cost to taxpayers in terms of lost tax revenue, would benefit borrowers who are struggling to repay their debts. Supporters suppose that borrowers would be helped directly by the deductibility of the benefit but also because employers would be incentivized by their own tax exemption to increase compensation.

This is not at all the case.

Since borrowers wouldn't be paying taxes on the portion of their compensation that was paid as a student loan repayment benefit, the same level of compensation could, at least theoretically, go farther.

But there's a flipside to that coin. This policy also makes it possible for....

Read the entire piece here at the Washington Examiner

______________________

Beth Akers is a senior fellow at the Manhattan Institute and coauthor of "Game of Loans: The Rhetoric and Reality of Student Debt."

Saved!
Close