Legislation would make CARES Act tax exemption for employer contributions to employee student loans permanent

Washington, D.C. (March 19, 2025) – The American Fintech Council (AFC), the premier industry association representing responsible fintech companies and innovative banks, today submitted a letter in strong support of the Employer Participation in Repayment Act, a bipartisan, bicameral bill introduced by Sens. Mark Warner (D-VA) and John Thune (R-SD) and Reps. Nicole Malliotakis (R-NY-11) and Scott Peters (D-CA-50). The bill would permanently extend the tax exemption for employer contributions toward employees’ student loans, originally established under the CARES Act and currently set to expire January 1, 2026. The legislation would allow employers to make tax-free contributions of up to $5,250 per year toward employees’ student loans, creating new opportunities for workers to pay down debt faster and for businesses to attract and retain talent.

“The passage of this legislation would mark a major step toward ensuring long-term financial security for millions of Americans burdened by student debt,” said Ian P. Moloney, SVP and Head of Policy and Regulatory Affairs at AFC. “Fintech companies, including AFC members like Candidly, have demonstrated the power of employer-sponsored repayment programs in improving financial outcomes for employees. We urge Congress to act swiftly to make these benefits permanent.”

AFC and its members—including fintech innovators in the student lending and servicing space—strongly support policies that help individuals manage student loan debt while fostering financial stability. AFC member Candidly, which facilitates student loan repayment and other benefits on behalf of employers, has facilitated over $100 million in tax-free employer student loan contributions under this exemption, helping employees pay down debt and leading to a 67% reduction in turnover among participants.

"Our platform has deployed over $100 million in tax-advantaged Student Loan Employer Contributions, enabling employees to accelerate debt repayment through workplace benefits,” said Laurel Taylor, CEO and Founder of Candidly. “For this powerful solution to reach its full potential and become standard practice in America’s workplaces, legislative permanency is essential. Only through sustained policy commitment can we scale this proven benefit category, transforming how we collectively address the student debt crisis facing millions of working Americans."

A standards-based organization, AFC is the premier trade association representing the largest financial technology (Fintech) companies and innovative banks offering embedded finance solutions. AFC’s mission is to promote a transparent, inclusive, and customer-centric financial system by supporting responsible innovation in financial services and encouraging sound public policy. AFC members foster competition in consumer finance and pioneer products to better serve underserved consumer segments and geographies.

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