Attorney Brad McCormack, of The Sader Law Firm, has dedicated his career to helping other people. As a student loan and bankruptcy attorney, he helps borrowers who are struggling with higher education debt. His skill and experience as an attorney was recently highlighted in an article published on Ingrams.com.
In the article, Brad discusses why student loan borrowers are more likely to job hop than people without student loans. This is especially problematic for companies with a Millennial workforce. Due to this issue, employers may face high turnover and constant instability.
Brad notes that employers are trying to develop policies for retaining student loan borrowers as employees. There are a couple of solutions discussed in the article. Possible solutions include:
Defined Contribution Plans for Student Loans
Defined contribution plans have advantages and disadvantages. With a defined contribution plan, an employer matches student loan payments with an employee in a designated account. This option is similar to a 401(k) match. At the moment, the IRS does not require taxes for this option.
However, there is an important disadvantage that Brad discusses. The IRS’ ruling on this matter is not codified into law. Employers who use this option may have to pay taxes in the future if there is a reverse ruling. Members of Congress recently introduced the Employer Participation in Recovery Act of 2019 (H.R. 1043), which would codify the current IRS policy, but with a tax-free employer match of $5,250.
Matching Student Loan Payments
Another option is to simply match payments with the employee, even if paying taxes on those payments is a requirement. Brad notes that this option also has some drawbacks because it may lead to trust issues between the employee and employer. The employee may not use this extra amount for student loan payments.
It is also difficult to determine whether the extra amount is considered a raise. However, Brad notes this option can be useful if done properly.
What Happens to Student Loans in the Near Future?
Brad argues that student loans are most likely here to stay. Presidential candidates, and the president himself, recently discussed possible options for addressing student loan problems. None are guaranteed to become law.
Brad finishes his article by stating that it is up to employers to face this new reality. On average, new members of the workforce are facing almost $30,000 in student loan debt. Employers must find a way to incentivize these workers to stay.
About Our Kansas City Student Loan Lawyers
Our Kansas City student loan lawyers can help you resolve issues with higher education debt. We have also helped our clients discharge student loans in bankruptcy. For more information about our student loan and bankruptcy services, call (816)281-6349 or use our online case review form.