Got Student Debt? Soon Your Employer Might Help With That

Kevin Carey was quoted in BuzzFeed News on the idea of employers paying off student loans:

The idea that employers paying off loans is a way to alleviate the student debt crisis is a "backwards way of thinking about things," said Kevin Carey, the director of higher education policy at the left-leaning New America Foundation.

"It's one step further away from the much more sensible idea of actually lowering the cost of higher education. Instead it just makes debt a little easier for a few people."

The real drivers of the student debt crisis are people who weren't able to graduate from college, Carey said, or who have low-wage jobs. Those employers aren't likely to offer benefits like paying off student loans; many don't even offer retirement savings. "The kind of employers that are going to want to do this are going to be recruiting well-off college grads," Carey said.

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Making student loan contributions tax-deductible — either for employers or employees — amounts to offering another taxpayer-funded benefit to mostly high earners, Carey said. And because it won't reduce the cost of college or help those who are struggling most, he added, there's no clear public benefit, the way there is for retirement and healthcare subsidies.

"This is just subsidizing the cost of higher education," Carey said, "for what is almost sure to be a disproportionately affluent sub-segment of the larger college-going population."