HARTFORD, CT – Today, State Senator Will Haskell (D-Westport) encouraged his colleagues in the Senate to approve legislation that will simultaneously support Connecticut businesses and make higher education more affordable. On Tuesday, the Senate voted to approve a bill that creates a tax credit for employers making loan payments on loans their employees received in Connecticut.
“The student loan debt crisis in America is nearing a breaking point. As the price of higher education continues to rise, the next generation of Connecticut workers is held back from buying that first home or starting that small business,” said Sen. Haskell. “We need creative solutions for problems like these, and this kind of strategy – which supports both employers and employees – will help. I am grateful to Senator Maroney and Senator Bergstein for their tireless work, deep policy knowledge and innovative thinking.”
Senate Bill No. 72, “An Act Establishing a Tax Credit for Employers That Make Payments on Loans Issued to Certain Employees by the Connecticut Higher Education Supplemental Loan Authority,” would provide a tax credit to employers making payments on their employees’ student loans. Individuals who refinanced their student debt through the Connecticut Higher Education Supplemental Loan Authority would be eligible.
This program is designed for employees who are full-time workers who have lived in Connecticut and been employed full-time for at least five years after graduation. Starting in 2022, each employer who makes loan payments directly to state loan authorities can claim a credit equal to half of the payments they make during any given year. The program allows them to receive these tax credits for no more than five years.
Federal bipartisan legislation would allow employers to contribute up to $5,250 tax-free to their employees’ student loans, and this bill would pair well with it. The Warner-Thune bill, cosponsored by Senators Richard Blumenthal and Chris Murphy, has received bipartisan support from eight Republican and eight Democratic Senators at the national level.
Connecticut student loan debt more than doubled from 2008 to 2017, increasing in size from $8 billion to $17 billion. Connecticut Realtors testified earlier this year that first-time home buyers are delayed up to seven years from making a purchase due to student loan debt. The three Senators who cosponsored this tax credit believe that this bill serves as an excellent recruiting tool for companies looking to attract new workers to the state of Connecticut.