LaHood proposes pro-growth solution to tackling student loan debt
A newly introduced bipartisan proposal offered by U.S. Rep. Darin LaHood (R-IL) would put student loan payments on par with how foundations make scholarship payments under the U.S. tax code.
“This bipartisan legislation will not only help recruit talent to often underserved areas and professions, relieve individuals of student loan debt, and help foster economic development to particular regions, but charitable organizations will be provided greater flexibility to serve their unique communities,” said Rep. LaHood.
The Workforce Development Through Post-Graduation Scholarships Act of 2018, H.R. 6486, would amend the Internal Revenue Code of 1986 to exclude certain post-graduation scholarship grants from gross income in the same manner as qualified scholarships to promote economic growth, according to the bill’s draft text.
“With this amendment to the tax code, foundations and charitable organizations across the 18th District will be able to attract greater talent and reward professionals for committing to their local communities,” the congressman added.
Post-graduation scholarships, according to the congressman’s office, are charitable grants that foundations would make to attract a skilled workforce that’s needed in a particular region. For example, a foundation that seeks to bring nurses or doctors to a community with a shortage of skilled medical professionals could award a post-graduation scholarship, but require that award winners live and work within a certain range of zip codes for a set number of years. In turn, the post-graduation scholarships would be used to pay off a portion of the award recipient’s student loans.
U.S. Rep. Terri Sewell (D-AL), the original cosponsor of H.R. 6486, pointed out that rural hospitals, in particular, often struggle to recruit medical professionals. Thus, programs such as what’s proposed under the bill “are a critical pipeline of talent.”
H.R. 6486 “takes a smart approach to building a skilled workforce in underserved communities while at the same time tackling our nation’s student debt crisis,” Rep. Sewell added.
Gene Cochrane, interim president and CEO of the Council on Foundations, said H.R. 6486 is long overdue because communities have been unable to retain skilled professionals “to fill the most-needed jobs.”
“Philanthropic organizations have been wanting to help,” said Cochrane. “This legislation gives foundations a much-needed tool to assist loan-burdened graduates and communities who need their skills.”
Josh Gibb, president and CEO of the Galesburg Community Foundation in Galesburg, Illinois, agreed and noted that in 2017, Illinois had the largest ‘out migration’ of skilled professionals of any state in the nation.
“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,” Gibb said.
H.R. 6486 has been referred to the U.S. House Ways and Means Committee for consideration.