Washington, D.C. – Representatives Darin LaHood (R-IL) and Terri Sewell (D-AL) introduced legislation 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.
Companion legislation was in Senate by Senators Shelley Moore Capito (R-WV) and Gary Peters (D-MI).
“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," said Rep. LaHood. "Our legislation will alleviate the growing student debt, foster economic growth, and help organizations attract better talent and reward professionals who commit to their local communities."
“By attracting talented individuals to the workforce in Alabama’s rural and underserved communities, post-graduate scholarship grants play a critical role in boosting local economic growth and fostering prosperity, all while alleviating the burden of student debt for hard-working professionals. I’m so proud to be introducing this legislation to ensure that these awards remain effective tools for businesses and community partners in Alabama’s 7th District,” said Rep. Sewell.
“Incentivizing West Virginians to stay in West Virginia, and encouraging people outside our state to move here is critical to reversing the population loss we’ve seen in recent years,” Senator Capito said. “Our bipartisan legislation would address the pattern the 2020 Census revealed by investing in recent college graduates with the ultimate goal of bringing in more people to live, work, and raise a family in the Mountain State.”
“By expanding access to post-graduation scholarships, we can help ease the staggering financial burden many recent graduates in Michigan face while promoting robust economic development in the communities that need their talent most,” said Senator Peters. “I am pleased to reintroduce this legislation that will help Michigan communities bolster their economies and provide much-needed assistance to those seeking to join our workforce.”
“The student debt crisis is damaging the financial futures of American students and families," said Kathleen Enright, President & CEO of the Council on Foundations. "For rural communities where it can be more difficult to attract or retain people with the skills to fill needed jobs, post-graduation scholarships are a great incentive for recent graduates to come back home or move to places they may not have previously considered. The Workforce Development Through Post-Graduation Scholarships Act provides foundations with tools to help attract talent to meet the needs in their communities. This legislation is a result of years of collaboration between members of Congress and philanthropic leaders, and I urge Congress to send this bill to the President’s desk to sign into law immediately,” added Kathleen Enright, President & CEO, Council on Foundations.
"The community foundation’s in Illinois are excited to see the leadership of Representative LaHood on an issue so important to the state of Illinois. Post-graduation scholarships will provide a critical tool for communities to attract and retain needed talent for our workforce. Our communities need good policy to unlock resources that will aid them in attracting highly skilled professionals with the education, skills and drive to make a difference in our communities- both urban and rural. 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,” added Joshua D. Gibb - President & CEO, Galesburg Community Foundation.
“As a community foundation serving rural Illinois, we help people give where they live. Our donors want to make a difference in the people and places of southeastern Illinois, and the post-graduation scholarship program can help them do that. It is a philanthropic tool to help reverse the brain drain and attract talent back to our communities. To see a young family move to town and fill a needed job is a win-win for our donors and recipients.
"Population decline, lack of skilled workers, and outmigration are enormous challenges for the entire state of Illinois, not just southeastern Illinois. Therefore, we are thankful that the State of Illinois has passed the first statewide resolution urging community foundations to create post-graduation scholarship programs to attract talent back to our state. I am looking forward to joining with many community foundation colleagues throughout the state in launching these programs. We want to change the narrative and show others that Illinois is a great place to live, work and raise a family! We want YOU in our state and community,” added Amanda Lessley, President & CEO, Southeastern Illinois Community Foundation.
A post-graduation scholarship is a type of charitable grant that foundations would make to attract individuals with needed career skills to a specific region and encourage starting or continuing careers in that region or community. It functions similar to a traditional scholarship but would pay off a portion of student loan debt 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 debt, a robust workforce helps to boost the economy and financial well-being of residents in the region.