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By: Jillian Berman

If the idea that your employer could help you pay off your student loans — a new perk several firms touted in recent months — sounds too good to be true, that’s because in some ways it is. Student loan borrowers are still required to pay taxes on the repayment benefits they receive from their employers — and that can add up.

A bipartisan group of senators would like to change that. Sen. Mark Warner (D-Va.), Sen. John Thune (R-SD) and Sen. Shelley Moore Capito (R-WV) introduced a bill that Thursday would allow employers to put up to $5,500 a year pretax toward their employees’ federal or private student loans.

Right now, just 3% of companies offer a student loan repayment benefit, according to the Society for Human Resource Management, but that number is likely to grow. Over the past several months, companies ranging from consulting and tax giant PricewaterhouseCoopers to a brothel in Nevada have announced programs to help their employees pay off student loans. Startups are even betting their livelihoods on the notion that the perk will become popular; over the past year, two firms launched services to help employers pay off their workers’ student loans.

Given that about 70% of bachelor’s degree recipients graduate with student loan debt, it makes sense that companies are increasingly using offers of student loan repayment as a way to lure talent. And though young people appear to be clamoring for the perk, it doesn’t come tax free. The bill introduced yesterday would change that and depending on the program cover the entire benefit offered by the employer. At PricewaterhouseCoopers, for example, the company has agreed to pay up to $1,200 a year for six years of employees student loans, well under the $5,500 a year pretax maximum Warner and others are proposing.

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Warner also introduced a bill Thursday with Republican presidential candidate Sen. Marco Rubio (R-Fl.) that would automatically cap federal student loan payments at a percentage of a borrower’s income, instead of requiring borrowers to choose between payment plans that allow the loan to be paid off in 10 years or payment plans that are tied to income.

The bill comes as Senate Democrats are promoting a package of legislation they say will make college more affordable and help to ease the burden for borrowers currently repaying student loan debt. Congressional Democrats and activists launched a campaign called In The Red during the State of the Union last week to call attention to student loan borrowers, particularly young adults, who are starting their lives in debt.

“Too many students are coming out of college in the red — that means they’re not getting married, that means they’re not starting that new business, that means they’re not trying to pursue their own career because they get crushed many times by $40,000, $50,000, $60,000 of student debt,” Warner said in a video announcing the bills.