Washington, D.C. - Representatives Darin LaHood (R-IL) and Terri Sewell (D-AL) introduced H.R. 4038 to amend the Internal Revenue Service Code to exclude certain post-graduate scholarship grants from being treated as gross income, which will alleviate student loan debt, help businesses recruit talent, and boost economic growth in our local communities. This legislation will create parity for student loan payments with how scholarship payments made by foundations are currently treated under the tax code.
“In our modern economy, it’s essential we recruit talent into our workforce in underserved and rural communities and provide workers with the resources they need to succeed,” stated Rep. LaHood. “This legislation won’t just bolster our labor force, it will also help alleviate the growing student debt crisis and foster economic growth across central and west-central Illinois. Under our bill, organizations will be able to attract better talent and reward professionals who commit to their local communities. I am proud to join Congresswoman Sewell in this effort and look forward to working with her and our colleagues to continue strengthening America’s workforce.”
“For rural and underserved communities like those in Alabama’s 7th District, it is critical that we do everything we can to train and attract skilled workers and remove barriers to higher educational attainment for working-class and underserved students,” said Rep. Sewell. “The Workforce Development Through Post-Graduation Scholarships Act is a win-win. Providing tax relief to recipients of post-graduation scholarships is a critical tool in attracting and retaining a skilled rural workforce, especially in the medical field. At the same, post-scholarship programs help loan-burdened skilled graduates serve these rural, underserved communities. I am proud to have worked with Congressman LaHood to continue to develop America’s workforce and invest in our rural and underserved communities.”
Josh Gibb, President & CEO, Galesburg Community Foundation added, “Post-graduation scholarships will provide a critical tool for communities to use to attract and retain needed talent for our workforce. Illinois continues to have a large out migration of residents. It is imperative that we develop the tools to retain and attract a skilled and needed workforce to our communities. Post-graduation scholarships are a win-win, because not only do the recipients benefit, but so do our communities, our employers, and the people who call our communities home.”
A post-graduation scholarship is a type of charitable grant that foundations would make to attract individuals with career skills needed in a region to build their careers in that community. It functions much like a traditional scholarship but would pay off a portion of student loans held by an individual who has already completed a degree or technical program.
Much like traditional scholarships, a foundation would establish appropriate eligibility requirements and put in place a process to verify that those requirements continue to be met through the duration of the scholarship award agreement. For example, a foundation that is looking to attract nurses or doctors to a community facing a shortage of qualified health professionals could award a post-graduation scholarship to a recipient but require that an individual live and be employed within a range of zip codes for a set number of years.
Aside from helping people achieve greater financial stability by alleviating a portion of an individual’s student loan debts, a robust workforce helps to boost the economy and financial well-being of residents in the region.