Addressing the Student Loan Debt Crisis: Doughty/ Campanale are the Problem Solvers on Affordability

The average recent college graduate in Massachusetts – of which there are many in our highly educated state – is saddled with more than $30,000 in student loan debt.  The average monthly payment for that student loan debt is more than $300.  Student loan debt is second only to home mortgage debt for many Massachusetts residents.

Everyone acknowledges student loan debt is a crisis.

Student loan debt proposals advanced by many progressives, such as eliminating student debt or making college tuition-free, don’t work and always result in a program that soaks the taxpayers and subsidizes irresponsibility.  Why should people who opt to work instead of attending college be forced to pay for other people’s educational decisions?  Why should people who paid their student loans be forced to pay back the loans for others?

The Doughty/Campanale student loan debt relief program encourages employers to make student loan debt payments on behalf of their employees and incentivizes responsible repayment of student loan debt with tax benefits.

As a member of the Legislature, Kate Campanale proposed this innovative bi-partisan solution to the student loan debt problem – and signed-up 25 Democrat co-sponsors.  Unfortunately, Kate’s bill did not make it out of the Legislature but another state picked-up Kate’s idea and enacted it into law.  

The Doughty/Campanale Administration will be committed to seeing Kate’s student loan debt repayment plan become law in Massachusetts.   

Chris Doughty and Kate Campanale believe the most effective solution of the student loan debt crisis must incentivize employers to contribute directly to the student loan debt of their employees.

The two incentives that would best catalyze employer and employee participation in student loan repayment efforts are:

1. Allow Massachusetts employers and employees to make direct contributions toward employee student loan debt and treat those payments as non-taxable income on the employee’s income tax return and provide a tax credit of up to $6,000 for employer student loan debt payments for their employees.  This change provides a solution to many who are on an income-based repayment plan.  Currently, if an employee with student loan debt is receiving this benefit from an employer, it is considered income – reducing the value of this benefit; and,
    
2. This proposal treats student loan debt like a 401(k) contribution and other matching assistance programs many companies offer as a recruitment benefit and retention incentive to their employees.

Large businesses already are aware of the value of providing student loan debt-oriented benefits and some have begun to implement them.  PriceWaterhouseCoopers has initiated a student loan payment program for its associate-level employees.  Other prominent Massachusetts businesses, such as Fidelity and Natixis Global Asset Management, are working on plans to do this as well.

Massachusetts-based innovation already is at the forefront of solving this problem.  Gradifi, a Boston-based company, has developed the technological platform to administer the student loan payments with PriceWaterhouseCoopers.  PriceWaterhouseCoopers is now paying toward the student loan debt of over 20,000 employees.  Clearly, the business community is very interested in this private sector approach.  According to Gradifi, there are 100 additional companies interested in working with them to incorporate student loan payments into their benefits packages.

Providing innovative student loan repayment support is an important tool to attract and retain talent in Massachusetts.  As Massachusetts competes with states like New Hampshire,  Tennessee, Texas, Virginia and Florida, the Commonwealth must attract and retain younger, talented and highly educated workers.

Leveraging these smart state incentives, Massachusetts companies have an opportunity to show how businesses can be part of the solution for workers who strive to pay off their debt, enter the housing market and plan for retirement.

Working together, business and government can solve this problem and alleviate the overwhelming practical and emotional burdens faced by so many of our residents – not by forgiving debt nor offering free tuition, but by continuing to hold individuals responsible for their debts and obligations.

By enacting this private sector-oriented student loan debt solution, incentivized by pro-employee and pro-employer state policy, Massachusetts can become more affordable and more competitive – giving many the opportunity and incentive to stay in Massachusetts and invest in our community, start a family, and boost our economy, while pursuing their careers and calling Massachusetts home.