Reps. LaHood, Sewell Introduce Legislation to Boost Post-Graduation Scholarships and Promote Economic Growth
WASHINGTON, D.C. — Representatives Darin LaHood (R-IL) and Terri Sewell (D-AL) introduced HR6486 today that would amend the Internal Revenue Code to exclude certain post-graduation scholarship grants from being treated as gross income and, in turn, help recruit professionals into the workforce, help alleviate student loan debt, and promote economic growth in communities. This legislation would create parity for student loan payments with how scholarship payments made by foundations are currently treated under the tax code. The bill text can be found, here.
“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,” stated Rep. Darin LaHood. “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. I want to thank my Democratic colleague Rep. Sewell for co-authoring this bi-partisan legislation with me and I look forward to working together to get this legislation passed."
“Today’s bill takes a smart approach to building a skilled workforce in underserved communities while at the same time tackling our nation’s student debt crisis,” said Rep. Terri Sewell. “By providing tax relief to recipients of post-graduation scholarships, our bipartisan legislation supports programs which recruit skilled graduates to work in struggling communities where they are needed most. For our rural hospitals, which struggle so often to recruit medical professionals, programs like these are a critical pipeline of talent. I am proud to have worked with my Republican colleague Rep. Darin LaHood to introduce today’s bill, and I look forward to continuing our fight to strengthen America’s workforce and invest in rural and underserved communities.”
“This is legislation long overdue. Communities have been grappling with retaining individuals with the necessary skills to fill the most-needed jobs, and philanthropic organizations have been wanting to help. This legislation gives foundations a much-needed tool to assist loan-burdened graduates and communities who need their skills,” said Gene Cochrane, interim president and CEO of the Council on Foundations.
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. Last year, Illinois had the largest out migration of any state in the union. 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.”
What is a post-graduation scholarship?
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.
How would a program like this work?
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-scholarship to a recipient but require that an individual live and be employed within a particular rage of zip codes for a set number of years.
How would this type of program contribute to economic growth?
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.