How to help students pay for college

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Prospective students tour Georgetown University’s campus in Washington, Wednesday, July 10, 2013. (AP Photo/Jacquelyn Martin)

Over the last three decades the average tuition at a public four-year college has more than tripled while a typical family’s income hasn’t come anywhere near close to keeping pace.

The result is that as college seniors prepare to graduate this month, the average student will graduate more than $30,000 in debt. Today, across the United States there is $1.3 trillion in student loan debt between more than 40 million Americans – a sum that is now larger than the total amount of credit card debt in our country.


Every student and parent in the country is acutely aware of this national crisis. Whenever I talk with students and parents I hear the same thing: college education is getting further and further out of reach because of the massive cost and the massive amount of debt that graduates are forced to take on.

But college students and recent graduates aren’t the only ones impacted by this trend. The student loan debt crisis has caused serious harm to our economy: home ownership, the creation of new businesses and contributions to retirement savings are all down among recent graduates as they struggle to pay back massive amounts of debt.

Sadly, even young children have become aware of the dismal trajectory that lay ahead of them. There are students all across our country – as young as middle school – who now believe that because their families don’t have the means to pay, they will never be able to go to college regardless of how hard they work. These are bright, hardworking students who fear they are being left behind because they assume they’ll just never be able to afford to go to college.

That’s unacceptable and must change.

Our country needs a highly educated work force. We need engineers, scientists, entrepreneurs, teachers and more. But, right now, our backward system is telling people all across our country that they won’t ever be able to get the education they need to reach their full potential. That makes absolutely no sense.

As the son of a schoolteacher, I’ve always believed that a quality education should be within reach for all, regardless of zip code or income. That’s why we introduced new legislation, called the HELP for Students and Parents Act, to reduce the burden of student loans and help families pay for college.

The bill proposes an important, yet commonsense shift in the way our country approaches student loan debt. By rethinking and modernizing how our country taxes graduates, we can unburden students and families from debt.

As graduates come out of college with crushing debts, its completely understandable that they’re delaying saving for the future to pay off student loans. In fact, nearly 60 percent of young workers are now opting out of their employer’s 401(k) match program to prioritize more immediate needs.

At the same time, only 3 percent of companies are offering student loan repayment assistance to their employees even though its clear that recent graduates want these programs. Statistics show that students are more likely to accept a job and stay longer in that job if their employer offers student loan benefits.

Our bill fixes this disconnect between priorities and policy by incentivizing employers to provide student loan repayment programs. By making contributions to student debt repayment tax-free for the employee, graduates will be able to pay back their loans faster and with a lower overall cost.

Right now under current law, if an employee has a base salary of $40,000 and receives a $5,000 payment toward their student loans from their employer, the federal government taxes the employee on $45,000 of income. After our bill is passed, the employee would only be taxed on $40,000 of income. The HELP for Students and Parents Act would save this employee more than $1,000 per year that could be used to pay down student loans faster, contribute to a 401(k) retirement savings account or pay for other necessities like rent, clothing and food.

The HELP for Students and Parents Act will also make it more affordable and accessible for families to contribute to college savings plans to help their children save for college by making employer contributions to 529 college savings accounts tax free.

As the father of three children and somebody who is still paying back his own student loans, I know this issue keeps parents up at night. I’m committed to ensuring that everybody who has the desire and ability can obtain the education they need regardless of income.

The HELP for Students and Parents Act sends the important message to every child that, if you work hard, you will be able to get a college education.

Robert Dold is the U.S. representative in the 10th Congressional District.

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