ARLINGTON, Va.–(BUSINESS WIRE)–Gradifi by E*TRADE at this time applauded Congress’ inclusion of key provisions of the Employer Participation in Repayment Act (H.R. 1043/S. 460) right into a broad stimulus invoice geared toward enhancing the US restoration from the COVID-19 epidemic.
The newly enacted statute will, amongst wider measures, supply tax reduction for student loan reimbursement advantages packages. Employers are actually in a position to make tax-free contributions of as much as $5,250 per worker yearly towards worker student debt with out elevating the worker’s gross taxable earnings.1 Under prior legislation, each staff and employers confronted tax obligations when taking part in student loan reimbursement advantages.
Following the US authorities’s short-term halt on federal student loan curiosity fees, the passage of the bipartisan reduction invoice that was signed into legislation presents a path for employers to interact in long-term options for debt-strapped staff. Student debt has doubled within the final 10 years2 and impacts employees throughout all demographic classes: One in three Millennials carry student debt, 45 million dad and mom maintain student debt for his or her grownup kids, and senior residents are the fastest-growing phase of student debt holders.3
Many employers don’t supply student loan advantages as a result of the tax remedy created a burden for his or her staff and corporations. This stimulus invoice removes boundaries for corporations to boost their worker monetary wellness, recruitment, and retention choices with pre-tax student loan reimbursement, and empowers staff to pay down their debt balances sooner.
“We commend this decision by lawmakers to significantly help our nation’s employees, providing a financial wellness lifeline amid these extremely difficult times,” stated Mike Pizzi, Chief Executive Officer of E*TRADE Financial. “This is a common-sense solution that will help employers attract, retain, and motivate a modern workforce. Student loan repayment benefits, now unburdened due to this new legislation, will undoubtedly play a key role in helping employees and employers work together to build healthy financial lives.”
“For many employees, financial success for tomorrow depends upon wise debt management today,” stated Kate Winget, Managing Director of Gradifi by E*TRADE. “With the passage of this landmark legislation, now every penny contributed through employer student loan repayment benefits will go straight to paying down employee debt, pre-tax. This will allow many of the 46 million Americans who collectively owe more than $1.6 trillion in student debt4 to take meaningful action.”
Gradifi by E*TRADE is an innovator in worker advantages for US employers. Its mission is to assist employers construct loyalty with their workforce by offering worker advantages that positively influence their staff’ monetary well-being. Gradifi by E*TRADE presents a single-platform resolution to permit employers to supply staff student loan refinancing alternatives, and employer-sponsored contributions to student loans and 529 faculty financial savings plan accounts. For insights from Gradifi by E*TRADE, go to www.gradifi.com or comply with the corporate on LinkedIn.
- CARES Act 116th Congress (2019-2020). https://www.congress.gov/bill/116th-congress/house-bill/748?q=%7B%22search%22%3A%5B%22%5C%22Coronavirus+Aid%2C+Relief%2C+and+Economic+Security+Act%5C%22%22%5D%7D&s=3&r=2
- Gradifi by E*TRADE, “Separating Fact from Fiction: The Truth About Student Loan Benefits,” July 2019, https://notebook.gradifi.com/workplace-trends/separating-fact-from-fiction-the-truth-about-student-loan-benefits
- Newsweek, “The Truth About Student Debt: 7 Facts No One Is Talking About,” August 2019, https://www.newsweek.com/2019/08/23/student-debt-loans-truth-facts-cover-story-1453057.html
- Board of Governors of the Federal Reserve System (US), Student Loans Owned and Securitized, Outstanding [SLOAS], retrieved from FRED, Federal Reserve Bank of St. Louis, March 3, 2020, https://fred.stlouisfed.org/series/SLOAS
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The E*TRADE Financial household of corporations offers monetary companies, together with buying and selling, investing, banking, and managing worker inventory plans and monetary wellness profit plans. Employee inventory and student loan profit plan options are supplied by E*TRADE Financial Corporate Services, Inc. Securities services and products are supplied by E*TRADE Securities LLC (Member FINRA/SIPC). Commodity futures and choices on futures services and products are supplied by E*TRADE Futures LLC (Member NFA). Managed Account Solutions are supplied by E*TRADE Capital Management, LLC, a Registered Investment Adviser. Bank services and products are supplied by E*TRADE Bank, and RIA custody options are supplied by E*TRADE Savings Bank, each of that are nationwide federal financial savings banks (Members FDIC). More info is accessible at www.etrade.com.
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