By Shaun Boyd
DENVER (CBS4) – Most have heard about a 401k for retirement savings. What about one to pay off your student loan? Colorado’s U.S. Sen. Cory Gardner introduced a bill that would allow employers to make tax-free contributions of up to $10,000 a year toward employees’ student loans, with or without an employee match.
Those who are self-employed could take a before-tax deduction of up to $10,000.
“We’ve seen this kind of idea work for retirements and other savings programs. Let’s put it to work for college,” Gardner said.
Four out of 10 people who’ve gone to college, have taken out loans and the College Board reports the average loan is $28,400.
Edi Rivas-Ojeda among those who has incurred debt. A civil engineering major at Metropolitan State University, he’s working three jobs to pay his way.
“It’s a big weight on the shoulders.” He worries the weight will only get heavier as he takes out more loans. “I think it will probably be a lot by the time I get out. Buying a home sounds really far-fetched.”
He says Gardner’s bill could help many people pay down their debt earlier.
“Setting up plans isn’t easy and this is what this would do for you. It just starts you off little by little, but everything helps.”
While the bill would reduce tax revenue to the federal government, Gardner says it would also allow employees to invest in their future by doing things like saving for retirement sooner, making them less reliant on the government in the long-run.
He suggests it could also be a workplace perk that helps with employee recruitment.
“One of the biggest concerns I hear around the state is the need for an educated, skilled workforce in Colorado and this would help us attract and retain that workforce,” Gardner said.
Gardner says the bill has bi-partisan support in Congress.