CUMBERLAND — The new federal stimulus bill extends the ability for employers to make tax-free student loan repayment contributions for employees until 2025.
The amount of the payments is capped at $5,250 per year per employee and is excluded from the employee’s taxable income.
“This is a significant benefit that businesses can offer employees, potentially helping retain staff and also as a valuable tool to recruit new employees,” said Secretary of Labor Kelly Schulz. “As we have done since this pandemic began, we want to make sure that Maryland businesses are aware of the many benefits of the CARES Act and other federal relief programs.”
“The goal of the Maryland Higher Education Commission continues to be student success with less debt,” Secretary James Fielder said. “This federal extension offers a great opportunity to employers to participate in a partnership that is mutually advantageous for the employers and employees.”
The Federal Reserve estimated that student loan debt in the United States reached $1.6 trillion in June 2019 and the Institute for College Access and Success lists the average student loan debt in Maryland for students attending a four-year institution is $30,303.
MHEC has created a webpage with the employer student loan repayment assistance extension information and will promote it through its social media channels.
This year, MHEC is responsible for administering scholarships and grants to more than 57,000 Maryland students, with expenditures totaling nearly $126 million.
These programs can be found at https://mhec.maryland.gov/preparing/Pages/FinancialAid/descriptions.aspx.