COLORADO SPRINGS – Walking across the stage, receiving a diploma and finishing college — for many, it’s supposed to signify the end of years of education and the beginning of a professional life.
There’s just one problem: student loan debt.
“We have a big problem. Student loan debt is now about $1.5 trillion in the United States. Forty-four million Americans are borrowers of a student loan with an average student loan debt of about $40,000,” said U.S. Sen. Cory Gardner (R- Colorado).
Gardner, who visited the News 5 studios Wednesday, is trying to curb rising higher education costs with the Student Loan Repayment Acceleration Act.
The bill would let employers help employees pay off their debt.
“For a person who’s just out of college that’s trying to start a family, maybe buy a home, simply pay the electricity bills, this kind of relief is going to be significant for them,” Gardner said.
It’s flexible for employers, giving them the option to contribute up to $10,000 tax-free toward each employee, comparable to current 401(k) plans.
Around Colorado Springs, where competition between skilled industries like technology, health care and sports medicine is high, experts said the bill could pay immediate dividends.
Rachel Beck, vice president for the Colorado Springs Chamber and Economic Development Corporation, said the legislation would help the area’s high-demand, high-skill job fields.
“Those are jobs that require a lot of education, and a lot of education means a lot of debt. So we are, in the Pikes Peak Region, potentially looking at a lot of employees that could benefit from this proposal,” Beck said.
Beck said Colorado’s low unemployment rate — which was 2.9 percent in August, 8th lowest in the nation — makes it hard for businesses not only to hire skilled workers, but retain them too.
That said, a potential benefit toward looming student loan debt could be a difference maker in the hiring process.
“If you’re an employee, and you’re comparing two different job offers, and one of them includes another $5,000 to $10,000 benefit, that’s a pretty significant boost for one over the other,” Beck said.
Gardner said he does not think the bill will encourage students to take on loan debt. Rather, that’s just a part of pursuing higher education.
Because the bill was introduced so late in the year, Gardner said he doesn’t expect action on it until 2019 by the 116th U.S. Congress.