The recent stimulus package in the US includes tax relief on employer payments for employee student loans. The policy, though, needs tweaking for sustained results.
Visualize the situation of an employee thanking his or her stars for having a job in the midst of the COVID-19 crisis. There is a lot of stress from the health crisis all around, given the veritable peril of infection at every step.
Student loan debt has crossed nearly USD 1.6 trillion in the US alone, as per Wayne Weber, the CEO of Gift of College, a financial services firm that allows employers to contribute to college savings plans and student loan accounts via payments from the payroll.
But how is this related to employees? Simple – many are enrolled for courses to augment their knowledge, and given the financial commitments therein, the stress of loan repayment will continue way beyond the COVID-19 crisis!
Presently, employers can contribute a maximum of USD 5,250 annually, tax-free, toward assistance for current tuition charges, which helps workers who are engaged in studies along with their jobs. However, this does not include the debt already accrued to employees on account of educational debt.