WASHINGTON – Today, U.S. Sens. Mark R. Warner (D-VA) and John Thune (R-SD), alongside U.S. Reps. Nicole Malliotakis (R-NY-11) and Scott Peters (D-CA-50), introduced the Employer Participation in Repayment Act – bipartisan legislation to help Americans tackle their student loan debt by making permanent a provision that allows employers to contribute up to $5,250 tax-free to their employees’ student loans.

In 2020, Sens. Warner and Thune along with Rep. Peters negotiated the inclusion of a provision in the CARES Act that allowed these contributions temporarily. Later that year, as part of the government spending package, they secured an extension allowing this benefit until January 1, 2026. By making this tax benefit permanent, today’s legislation would provide employees with much-needed relief and employers with a unique and permanent tool to attract and retain talented employees.

“As the first in my family to graduate from college, I wouldn’t have been able to afford my tuition without the help of student loans,” said Sen. Warner. “Unfortunately as the cost of higher education continues to skyrocket, so has the rate of Americans who turn to student loans to pay for college. Today too many Americans are saddled with tough-to-manage student loan debt, with no end in sight. That’s why I’ve teamed up with Sen. Thune to create an innovative, bipartisan approach to help ease the burden of student loans. By making employer student loan repayments tax-exempt, employers will have a tool to recruit and retain a talented workforce while also helping working Americans manage their financial future.”

“Incentivizing employers to help repay their employees’ student loans was a common-sense step Congress took to address the high levels of student debt that borrowers face,” said Sen. Thune. “This bill would permanently equip employers with this unique tool to help attract and retain talented employees while protecting American taxpayers from costly burdens. This is a win-win for graduates and their employers, and I hope it will once again garner strong, bipartisan support.”

“Over the past 20 years, the cost to attend college has risen 45 percent, forcing students to choose between pursuing higher education and taking on tens of thousands of dollars in burdensome student loan debt,” said Rep. Malliotakis. “Our bipartisan legislation enables employers to contribute up to $5,250 per year, tax-free, toward their employees’ student loans—helping those entering the workforce pay down debt faster and build a stronger financial future. This tax incentive will continue to strengthen our workforce, increase our nation’s competitiveness, and provide much-needed economic relief to millions of Americans.”

“I relied on student loans to get through college when the cost of higher education was much lower than it is today. Now, the collective debt among Americans is $1.7 trillion, which limits our economic growth and the economic prospects of young adults,” said Rep. Peters. “Over the last five years, this program has been a huge success — employers have helped pay off thousands of employees’ loans and it gave employers a tool to compete for the best talent. This public-private collaboration has proven itself as a cost-effective solution to the student debt crisis and it is imperative that we make it permanent.” 

Americans owe a combined $1.77 trillion dollars in student loan debt, according to the most recent quarterly report from the Federal Reserve. This debt is a significant financial burden that not only influences the way the American workforce saves and spends, but also has a stifling effect on the economy. This legislation would update an existing federal program so that it works better for employees living with the reality of burdensome student loan debt.

The legislation has support from numerous educational organizations and business groups.

“The National Association of Independent Colleges and Universities (NAICU) is pleased to support bipartisan legislation that would make permanent the expansion of IRC Sec. 127. This expansion to allow student loan repayment assistance should absolutely be a permanent benefit and not expire next year as currently scheduled.  This assistance helps working students, employers, and ultimately the U.S. economy. Section 127 benefits play a critical role in maintaining U.S. competitiveness and preventing the accumulation of student debt by enabling employers to fund the training, development and education of their employees, without imposing tax burdens on those employees for the education they receive.  Employees use these benefits to pursue their educational and career goals and use amounts provided by their employer to either help pay for the cost of tuition or repay student loans,” said Karin Johns, Director of Tax Policy, National Association of Independent Colleges and Universities.

“The bipartisan and bicameral Employer Participation in Repayment Act will reduce borrowers’ student loan burdens and encourage successful repayment. In turn, it gives employers a permanent tool with which to attract a stable workforce. EFC is proud to endorse this legislation, and we look forward to collaborating with you to advance public policies that appropriately balance the interests of student loan borrowers, employers, and taxpayers,” said Gail daMota, President, Education Finance Council.

“The U.S. Chamber supports the Employer Participation in Repayment Act because it allows employers voluntarily to provide a valued employee benefit that helps their employees’ financial well-being,” said Chantel Sheaks, Vice President, Retirement Policy, U.S. Chamber of Commerce

“Candidly has facilitated more than $100M in tax-free Student Loan Employer Contributions to help employees pay down their debt faster, as a workplace benefit, resulting in a whopping 67% reduction in turnover across participating workers. Permanency is crucial to sustaining and scaling this highly efficacious new category of benefit into a new normal,” said Laurel Taylor, CEO, Candidly.

“Fidelity Investments commends the bipartisan re-introduction of the Employer Participation in Repayment Act. Permanently extending this important incentive is critical to the American workforce’s financial wellness. As a market leader for student debt workplace benefits since 2016, Fidelity has enabled hundreds of employers across a wide range of industries to seamlessly contribute to and ease the student debt burden for their employees. To date, these employers have helped more than 100k employees save more than $500mn and an average of 3-4 years in payments. The growth and popularity of these benefits have accelerated since the introduction of this provision as part of the 2020 CARES Act, and we look forward to working with Congress to enact this legislation permanently into law,” said Jesse Moore, Senior Vice President, Head of Student Debt at Fidelity Investments.

"We commend Senators Thune and Warner, along with Representatives Malliotakis and Peters, for their leadership in introducing the Employer Participation in Repayment Act. Making the student loan repayment expansion permanent is a critical step toward easing the financial burden on millions of Americans while empowering businesses to attract and retain top talent. This bipartisan, bicameral effort underscores a shared commitment to workforce development, economic growth, and financial well-being for employees nationwide. We urge Congress to pass this legislation and ensure long-term support for student loan repayment benefits,” said Chatrane Birbal, Vice President of Policy and Government Relations at the HR Policy Association. 

“SHRM strongly supports the reintroduction of the Employer Participation in Repayment Act, a bipartisan bill that would permanently allow employers to assist employees in repaying their student loans. At SHRM, we have long championed policies that empower employers to provide education assistance programs that align with the evolving needs of the workforce. This legislation is key to strengthening the education-to-employment pipeline—ensuring that individuals can pursue and complete their education without being burdened by overwhelming debt, while also helping employers build a skilled and competitive workforce. This legislation provides a commonsense solution that would benefit workers, workplaces, and the economy,” said Emily M. Dickens, Chief of Staff and Head of Government Affairs at the Society for Human Resource Management.

“We commend the introduction of bipartisan legislation to permanently extend the student loan repayment benefit under Section 127. Supporting efforts by employers to offer education or debt relief to their employees is both economically and fiscally responsible. This bill is a crucial step towards modernizing Section 127 of the tax code, addressing the evolving needs of employees, and ensuring our workforce remains competitive. InStride is dedicated to reducing the burden of student debt and expanding economic opportunities through innovative employer-sponsored education programs. This legislative effort aligns with our mission and helps create a more financially resilient workforce,” said Craig Maloney, CEO, InStride.

“The National Association of REALTORS ® (NAR) has long supported efforts to ease the burden of student loan debt. The Employer Participation in Repayment Act is a useful tool in easing the weight of student debt. NAR applauds the leadership from Representatives Peters and Malliotakis and Senators Warner and Thune in making this change permanent. This legislation creates a win-win for both employers in search of attracting and maintaining talented workers and employees who will receive relief on their debt, enabling them to save money for important life decisions like purchasing a home,” said National Association of Realtors® President Kevin Sears.

“Extending the tax exclusion for employer-provided student loan repayment assistance is crucial for today’s U.S. workforce and is 100% aligned with employer perspectives on these benefits,” said Scott Thompson, CEO of Tuition.io. “As the cost of higher education continues to skyrocket, this benefit enables companies to foster a more educated and skilled workforce, while helping their employees cover basic living expenses, a challenge for so many people today. Since Tuition.io started administering contributions in 2016, employers on our platform have helped pay down student loan debt for hundreds of thousands of employees in key sectors like healthcare, manufacturing, and technology. We at Tuition.io strongly support making these benefits under Section 127 permanent, as their removal would be a significant setback for both corporations and their employees.”

"The introduction of this bill is a huge step in the right direction and, when passed, will be a major win for companies, employees, and society at large. Tax-free employer contributions to student loans is a great way to help employees pay back student loans while providing a unique incentive for employees to align with company priorities. As the cost of education has and will likely continue to rise, this benefit will help alleviate the financial stress employees have incurred in order to gain employment. Permanently including employer student loan contributions under tax-free educational assistance will help pave the way for more employers to play a massive role in solving the student debt crisis,” said Mick MackLaverty, CEO of Highway Benefits.

“We are proud to support this initiative and grateful to Congressmember Peters for his dedication to San Diego’s small businesses,” said Jessica Anderson, Interim President and CEO of the San Diego Regional Chamber of Commerce. “The Employer Participation in Repayment Act of 2025 will expand the benefits employers can offer by assisting with student debt repayment, in turn helping small businesses attract and retain talent in a competitive workforce. 

Full text of the legislation can be found here. A summary of the legislation can be found here.

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WASHINGTON – This evening, U.S. Sen. Mark R. Warner (D-VA) took to the Senate floor to speak on the urgent need to enact the Congressionally-approved Joint Consolidation Loan Separation Act, legislation he authored and championed to provide much-needed relief for individuals who previously consolidated their student loan debt with a spouse.  

“In 2017, I introduced the Joint Consolidation Loan Separation Act to solve this problem and give borrowers a way out of these exploitative loans. It took seven years, but we got the bill through Congress with bipartisan support. This is a rare accomplishment. As a Congress, it’s not often that we pass standalone bills. Much less ones with unanimous Senate support or bipartisan House support. That’s a testament to what a critical and commonsense fix this is ­ —one that will actually change the lives of thousands of folks almost overnight,” said Sen. Warner on the floor of the U.S. Senate.

“I’d like to close in saying that this week, I called Sara back, the constituent who originally brought this to my attention,” he continued. “She told me that without this law, and even if she’d continued making all her monthly payments, it would be impossible to erase this debt in her lifetime. She would be tied to her ex-husband for the rest of her life. For Sara, and for all the thousands of borrowers impacted by this, it’s time for President Biden to sign this and finally free these borrowers.

Sen. Warner’s remarks as prepared for delivery are available below:

M. President, I rise today to celebrate a major accomplishment for thousands of Americans who have been trapped for decades in exploitative… joint student loans.

This is an issue that is near and dear to me… because I’ve been working on it for seven years… since hearing from a constituent in 2015.

Sara from Northern Virginia was part of a group of student loan borrowers who entered into something called a “joint consolidation loan,” which allowed married couples to combine their student loan debt into one loan.

In 2006, Congress got rid of this program. However, Congress did not create a way for folks to split the loan back into two.

When my constituent, Sara, divorced from her husband, she was still responsible for this loan. All of the debt had originally been his, but when he decided to stop paying… it was Sara who had to continue facing the consequences.

A single mom of two and a public school teacher… Sara was financially on the hook for the payments. Her credit suffered and she even faced the possibility of losing her teacher’s license.

After looking for a way out, she found out that the only way she could be free of her ex-husband’s debt was through an “act of Congress.” So she contacted my office, and we found out that across the country, thousands of borrowers were trapped in similar situations.

Domestic violence survivors were bound to their abusers by loans. Many were victims of financial abuse and were held completely responsible for debt they’d never taken out. Others were unable to save for retirement or their children’s educations. Public servants were left out of loan forgiveness programs because of the unique constraints of these loans.

In 2017, I introduced the Joint Consolidation Loan Separation Act to solve this problem and give borrowers a way out of these exploitative loans.

It took seven years… but we got the bill through Congress with bipartisan support.

This is a rare accomplishment. As a Congress, it’s not often that we pass standalone bills. Much less ones with UNANIMOUS Senate support or bipartisan House support.

That’s a testament to what a critical and commonsense fix this is … one that will actually change the lives of thousands of folks almost overnight. Since we introduced this law the first time, my office has heard from so many Americans that are desperate to get this done.

Chris, from Indiana, said: “I’ve spent over sixteen years thinking about this loan every day… and waking up at night trying to create a strategy to pay this loan off. For the first time, I may be able to put my mind at peace.”

Sharon… a 7th grade teacher whose former partner has not made a payment in years… told us, “I don’t have to do this anymore. I get to live my life. I get to retire this year.”

Jessica…. whose former partner refuses to pay his share of the loan…. said, “I am finally about to be free… of one last way my ex controls me.”

Amy is a public servant who has never been able to take advantage of a single debt-relief program. This bill will change that.

All these people have asked for… is a chance to take their student loans into their own hands, and not be saddled with the debt of a former partner.

Applications for the Temporary Expanded Public Service Loan Forgiveness Program close on Oct. 31 of this year.

Many of these borrowers are public school teachers and government workers. They need to be able to apply by that deadline so they are eligible for the same benefits all other Americans have enjoyed.

I am hopeful that Pres. Biden will sign this into law as soon as possible so that these borrowers can finally experience freedom from financial and domestic abuse… freedom to control their own financial future… and freedom to enjoy the same benefits as other borrowers across the country.

I’d like to close in saying that this week, I called Sara back, the constituent who originally brought this to my attention.

She told me that without this law… and even if she’d continued making all her monthly payments… it would be impossible to erase this debt in her lifetime. She would be tied to her ex-husband… literally… for the rest of her life.

For Sara, and for all the thousands of borrowers impacted by this, it’s time for Pres. Biden to sign this and finally free these borrowers. 

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WASHINGTON – U.S. Sen. Mark R. Warner (D-VA) today applauded the Senate passage of the Joint Consolidation Loan Separation Act of 2021, legislation to provide much-needed relief for individuals who previously consolidated their student loan debt with a spouse. Although Congress eliminated the program on July 1, 2006, it did not provide a means of severing existing loans, even in the event of domestic violence, economic abuse, or an unresponsive partner. As a result, there are borrowers across the country who remain liable for their abusive or uncommunicative spouse’s portion of their consolidated debts. This legislation provides relief to these individuals by allowing borrowers to split this debt.

“The Senate passage of this commonsense legislation is a huge step for survivors of domestic violence and financial abuse who have spent decades fighting for their financial freedom. By finally allowing individuals to sever their joint consolidation loans, this bill will provide needed respite to vulnerable individuals who are being unfairly held responsible for the debt of a former partner. I urge my House colleagues to act with urgency and send this bill to the President’s desk as soon as possible.”

The Joint Consolidation Loan Separation Act would allow borrowers to submit an application to the Department of Education to split the joint consolidation loan into two separate federal direct loans. The joint consolidation loan remainder – the unpaid loan and accrued unpaid interest – would be split proportionally based on the percentages that each borrower originally brought into the loan. The two new federal direct loans would have the same interest rates as the joint consolidation loan. Additionally, the bill would enable borrowers to access student loan relief programs, such as the Public Service Loan Forgiveness (PSLF) Program and income-driven repayment programs for which they were previously ineligible due to their joint consolidation loans.  

Sen. Warner authored the original version of the Joint Consolidation Loan Separation Act in 2017 after a constituent of his, Sara from McLean, Virginia, contacted him to communicate her struggles with a joint consolidation loan. Sara was raising two children on a public school teacher’s salary in Northern Virginia and trying to keep up with payments on her student loans. Unfortunately, her ex-spouse, whom she had divorced and moved thousands of miles away from to start fresh, refused to pay his share of their joint loan. Because joint consolidation loans create joint and several liability for borrowers, Sara faced the threat of having her wages as a public school teacher garnished if she did not pay both her and her ex-husband’s portions of their debt. Sen. Warner did not think this was fair and sought to create a solution, so that constituents like Sara could control their own financial futures. You can hear Sen. Warner tell Sara’s story here.

The Joint Consolidation Loan Separation Act has been supported by a number of organizations, including the National Network to End Domestic Violence, National Consumer Law Center, North Carolina Coalition against Domestic Violence, and the Virginia Sexual and Domestic Violence Action Alliance.

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