The average recent Massachusetts college graduate — of which there are many in our highly educated state — is saddled with more than $30,000 in student loan debt. The average monthly payment for this student loan debt is over $300. Student loan debt is second only to mortgage debt for many Massachusetts residents.
Everyone recognizes that student loan debt is a crisis.
The student loan debt proposals advanced by many progressives, such as eliminating student debt or making tuition free, do not work and always result in an agenda that sucks up taxpayers and subsidizes irresponsibility. Why should people who choose to work instead of go to college have to pay for other people’s education decisions? Why should people who have paid their student loans be forced to repay the loans for others?
The Doughty/Campanale Student Loan Debt Relief Program encourages employers to make student loan debt repayments on behalf of their employees and incentivizes responsible repayment of student loan debt with tax advantages.
As Member of the Legislative Assembly, Kate Campanale proposed this innovative bipartisan solution to the student debt problem – and signed 25 Democratic co-sponsors. Unfortunately, Kate’s bill didn’t pass the Legislative Assembly, but another state picked up Kate’s idea and signed it into law.
The Doughty/Campanale administration will pledge to ensure that Kate’s student debt repayment plan becomes law in Massachusetts.
Chris Doughty and Kate Campanale believe the most effective solution to the student debt crisis is to get employers to contribute directly to their employees’ student debt.
The two incentives that would best catalyze employer and employee participation in student loan repayment efforts are:
- Allowing Massachusetts employers and employees to make direct contributions toward employee student loan debt and treat those payments as non-taxable income on the employee’s tax return and allow a tax credit of up to up to $6,000 for employer student loan debt payments for their employees. This change provides a solution for many people who have an income-based repayment plan. Currently, if an employee with student loan debt receives this benefit from an employer, it is considered income, which reduces the value of this benefit; and,
- This proposal treats student loan debt as a 401(k) contribution and other matching assistance programs that many companies offer as a recruitment benefit and retention incentive to their employees.
Large companies are already seeing the value of offering student loan benefits and some have begun to implement them. PriceWaterhouseCoopers has launched a student loan payment program for its associate-level employees. Other major Massachusetts firms, such as Fidelity and Natixis Global Asset Management, are also working on plans to do so.
Massachusetts-based innovation is already at the forefront of solving this problem. Gradifi, a Boston-based company, developed the technology platform to administer student loan repayments with PriceWaterhouseCoopers. PriceWaterhouseCoopers is now paying student loan debt for more than 20,000 employees. Obviously, the business community is very interested in this private sector approach. According to Gradifi, 100 more companies want to work with them to integrate student loan repayments into their benefits.
Providing innovative student loan repayment support is an important tool for attracting and retaining talent in Massachusetts. As Massachusetts competes with states like New Hampshire, Tennessee, Texas, Virginia and Florida, the Commonwealth needs to attract and retain younger, talented and highly skilled workers.
Leveraging these smart state incentives, businesses in Massachusetts have an opportunity to show how businesses can be part of the solution for workers struggling to pay off debt, enter the housing market and plan for their retirement.
By working together, business and government can solve this problem and ease the crushing practical and emotional burdens faced by so many of our residents – not by canceling debt or offering free tuition, but by continuing to hold individuals responsible for their debts and obligations.
By embracing this private sector-focused student loan debt solution, incentivized by pro-employee and pro-employer state policy, Massachusetts can become more affordable and more competitive – giving many the opportunity and incentive to stay in Massachusetts and invest in our community, start building a family and boosting our economy, all while pursuing their careers and settling in Massachusetts.