To amend Section 125 of Internal Revenue Code to include employer sponsored Student Loan FSAs. The SLFSA would allow employees to contribute pre-tax dollars to accounts where these funds are applied only to eligible existing student loan debt, these accounts also remove this tax burden from employers payrolls. The SLFSA would mimic the dependent care FSA.
Why is this important?
In order to pay off staggering amount of student loan debt, debtors should be able to use pre-tax dollars to pay back government loans. The senate has proposed a bill to garnish wages to repay student loan debt with after tax dollars. Using a SLFSA will expedite and ensure loan repayment more effectively than wage garnishment and after tax dollars.
