U.S. Representative

Dennis A. Ross

Proudly Serving Florida's 15th Congressional District

Ross Opinion Pieces


Responsible Solutions to Repaying Student Debt

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Washington, December 14, 2016 | comments

Published in Florida Politics, Saint Peters Blog, Sunshine State News, The Hill and Washington Examiner.

The Government Accountability Office‭ (‬GAO‭) ‬recently‭ ‬published a report stating that federally issued Direct Student Loans‭ ‬placed‭ ‬in Income-Driven Repayment‭ (‬IDR‭) ‬plans will cost the government‭ ‬$74‭ ‬billion,‭ ‬which is higher than previously estimated.‭ 

According to‭ ‬the‭ ‬GAO,‭ ‬as of June of this year,‭ ‬5.3‭ ‬million‭ ‬student loan‭ ‬borrowers are repaying their loans in IDR plans.‭ ‬This means‭ ‬5.3‭ ‬million borrowers are repaying their loans with smaller monthly payments,‭ ‬thereby‭ ‬extending the time in which they will‭ ‬actually‭ ‬repay the entirety of these loans.‭ ‬All the while,‭ ‬loan interest continues to accrue,‭ ‬holding borrowers underwater even longer.‭ ‬Couple this with the usage‭ ‬of‭ ‬Public Service Loan Forgiveness‭ ‬and other forgiveness programs,‭ ‬it is clear the federal government,‭ ‬and the taxpayers backing these loans,‭ ‬will‭ ‬never see the money it has lent.‭ 

I believe all who desire to obtain an education should have the opportunity to do so.‭ ‬Education,‭ ‬particularly higher education,‭ ‬has the ability to raise individuals and families from less than desirable situations in life and open the door to greater opportunities.‭ ‬Education prepares us for much more than just work.‭ ‬It‭ ‬gives us the ability to better contribute to‭ ‬our families and society,‭ ‬and enables us to more effectively help others and ourselves.‭ 

Loans are,‭ ‬indeed,‭ ‬an important component‭ ‬in helping students obtain an affordable education.‭ ‬Unfortunately,‭ ‬most students‭ ‬today‭ ‬are saddled with extraordinary debt and‭ ‬have entered one of the weakest‭ ‬economic‭ ‬recoveries in history.‭ ‬Such a dangerous combination limits students‭’ ‬ability to start paying back their taxpayer-backed loans after graduation.‭ ‬This is a serious problem we cannot continue to ignore.

Throughout the past‭ ‬25‭ ‬years,‭ ‬the cost of‭ ‬attending college has quadrupled.‭ ‬About‭ ‬60‭ ‬percent‭ ‬of students take out loans to finance their education,‭ ‬and more than half borrow over‭ ‬$10,000.‭ ‬In fact,‭ ‬more than‭ ‬43‭ ‬million Americans owe nearly‭ ‬$1.3‭ ‬trillion in student loans,‭ ‬with a repayment delinquency rate of‭ ‬11.6‭ ‬percent.‭ ‬That is more than‭ ‬$150‭ ‬billion in student loan delinquency,‭ ‬not including interest.‭ 

As the cost of a college education continues to rise,‭ ‬student‭ ‬loan‭ ‬borrowing will continue to take place.‭ ‬Something must be done to incentivize and enable‭ ‬borrows to pay off their loans and lessen the burden on the government.

In order to do just that,‭ ‬I introduced the Student Loan Repayment Act of‭ ‬2016.‭ ‬This bill adds employees with student loans as a qualifying population to‭ ‬the‭ ‬Work Opportunity Tax Credit.‭ ‬In order to receive this credit,‭ ‬the employee must be an individual with an associate’s degree or higher and have at least‭ ‬$10,000‭ ‬in student loan debt.‭ 

Additionally,‭ ‬the Act allows for a‭ ‬$1,500‭ ‬tax credit to employers‭ ‬who implement a repayment match program for their employees.‭ ‬This tax credit is available for each program enrollment by an employee and is‭ ‬spread over three years.‭ ‬In order to receive this credit,‭ ‬employers must meet a minimum qualifying match contribution of‭ ‬$2,000‭ ‬per year.‭ 

Lastly,‭ ‬this bill states the match program contributions made by the employer are considered income to the employee.‭ ‬Therefore,‭ ‬the employee will be taxed on the contributions made by the employer,‭ ‬and thus,‭ ‬is held accountable to our tax system.‭ 

The Student Loan Repayment Act‭ ‬does not provide a bailout or exempt student loan borrowers from repaying their incurred debt.‭ ‬Instead,‭ ‬this bill‭ ‬helps students become gainfully employed and pay off their loans while employers are benefitted by hiring skilled and educated employees with a vested interest in long-term employment.

As the father of two sons and a former small business owner,‭ ‬I know first-hand the important role education plays in today’s society.‭ ‬Students are the foundation of our country’s future,‭ ‬and we must ensure they have the ability to afford a college education and compete in an increasingly global marketplace without being bogged down by crippling debt.‭ 

As we focus on helping students repay their‭ ‬taxpayer-backed‭ ‬student loans,‭ ‬improve their credit,‭ ‬and contribute to our communities,‭ ‬I will continue working with my colleagues on solutions to create jobs,‭ ‬boost our economy,‭ ‬and reduce our debt and deficit.

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