DEVELOPMENT OF INTEREST: State Lawmakers to Push for Student Loan Tax Exemption Amongst Private Employers

Many employers are facing challenges in finding and retaining staff during the pandemic. A new legislative proposal may help with both.

Earlier this month, Massachusetts lawmakers, led by Rep. Katie Lipper-Garabedian, argued for the implementation of a new tax exemption for private Massachusetts employers who assist their employees with paying off student loan debt.

Capped at $2,000 per employee, lawmakers argue the exemption would provide much needed relief for student loan borrowers. Similar programs utilized by companies like Fidelity and PwC, which have had great success, serve as an attractive employee benefit. They have shown to be effective at retaining employees, which employers have spent much time and energy into training and recruiting highly qualified candidates. As we are the amid the “Great Resignation,” with millions of open jobs across a wide array of industries, implementing a program to this effect could help employers lure employees back into the workforce.

Currently, there are nearly 872,000 Massachusetts employees straddled with a collective student loan debt of $36 billion. The Department of Revenue estimates the tax exemption would have a “modest” cost, but a “resounding economic impact for years to come.”

Whether the legislation ends up passing remains to be seen. Even still, it may be worthwhile for private employers to start thinking about implementing a student loan assistance program, as it does have its benefits. 

If you have questions about this topic, or any other general employment issues, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288.