Employer Participation in Repayment Act
- Bill Number
- H.R. 1801
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-03-03: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-05-27T08:05:43Z
AI-Generated Summary
Purpose
The Employer Participation in Repayment Act (H.R. 1801) aims to make permanent a tax benefit that allows employers to pay off part of their employees' student loans without the payments being taxable income. This encourages employers to help with student debt as part of educational support programs.
Key Provisions
- Amendment to Tax Code: The bill changes Section 127(c)(1)(B) of the Internal Revenue Code (IRC) of 1986, which currently excludes up to $5,250 per year in employer-provided educational assistance from an employee's taxable income.
- Specific Change: It removes the temporary limit that applies only to payments made before January 1, 2026, extending the exclusion indefinitely.
- Effective Date: The change applies to payments made after the bill's enactment into law.
Significant Changes to Existing Law
- Under current law, the exclusion for employer payments toward student loans (introduced during the COVID-19 pandemic) is temporary and set to expire after 2025, reverting to the original IRC rules that did not include student loan repayments in educational assistance.
- This bill eliminates the expiration date, making the provision a permanent part of the tax code and aligning student loan repayments fully with other nontaxable educational benefits.
Potential Impacts
- On Citizens: Employees with student loans could receive up to $5,250 annually in tax-free assistance from employers, reducing their tax burden and helping manage debt more affordably. This may particularly benefit younger workers or those in entry-level jobs.
- On Employers: Businesses may be more likely to offer student loan repayment as a perk to attract and retain talent, potentially improving workforce participation without increasing employees' taxable income.
- On Government Agencies: The Internal Revenue Service (IRS) would administer the permanent exclusion, leading to a potential ongoing reduction in federal tax revenue (estimated in billions over time, though not specified in the bill). No direct impact on international relations is noted.
- Broader Economy: Could indirectly boost economic mobility by easing student debt, a major issue for many Americans, without requiring new government spending.
Main Stakeholders Affected
- Employees: Primary beneficiaries, especially those with federal or private student loans, as they gain tax-free financial relief.
- Employers: Gain flexibility to include student loan payments in benefits packages, potentially enhancing competitiveness in hiring.
- U.S. Treasury and IRS: Responsible for enforcing the tax exclusion, facing revenue losses from nontaxable payments.
- Educational Institutions and Lenders: Indirectly affected, as reduced debt burden might influence borrowing and repayment patterns.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens the IRC's educational assistance framework (Section 127) by integrating student loan relief permanently, avoiding future congressional action to extend it. No challenges to constitutional authority are evident, as it falls under Congress's power to regulate taxation.
- Fiscal: Introduces a permanent tax expenditure, which could increase the federal budget deficit unless offset elsewhere; this might spark debates on tax policy equity.
- Political: Bipartisan sponsorship (by Rep. Malliotakis and Rep. Peters) signals broad support for addressing student debt, a nonpartisan issue, but could face opposition from fiscal conservatives concerned about revenue loss. Referred to the House Ways and Means Committee for tax-related review.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Malliotakis, Nicole [R-NY-11]
Cosponsors (6)
Rep. Peters, Scott H. [D-CA-50], Rep. LaHood, Darin [R-IL-16], Rep. Costa, Jim [D-CA-21], Rep. Harder, Josh [D-CA-9], Rep. Vindman, Eugene Simon [D-VA-7], Rep. Thanedar, Shri [D-MI-13]
Recent Actions
- 2025-03-03: Referred to the House Committee on Ways and Means.
- 2025-03-03: Introduced in House
- 2025-03-03: Introduced in House
Bill Versions
- Employer Participation in Repayment Act — issued 2025-03-03 — PDF (2 pages)