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Peters Announces Reintroduction of Bipartisan Bill to Alleviate Student Loan Debt & Help Communities Fill Worker Shortages

WASHINGTON, DC – U.S. Senator Gary Peters (MI) reintroduced his bipartisan legislation to help alleviate student loan debt while addressing worker shortages in communities in Michigan and across the country.

The Workforce Development Through Post-Graduation Scholarships Act – which Peters introduced with U.S. Senator Shelley Moore Capito (R-WV) – would mandate that scholarship recipients of post-graduation grant programs are not required to pay income taxes on awarded funding, similar to traditional scholarships. Post-graduation scholarships are grants that help recent graduates pay down their student debt if they live and work in areas experiencing a shortage of their particular skills. Peters’ legislation would help ease the financial burden individuals face from student loan debt, while incentivizing graduates to start their careers in fields that are experiencing worker shortages. Companion legislation was introduced in the U.S. House of Representatives by Representative Terri Sewell (D-AL) and Representative Darin LaHood (R-IL).

“There are commonsense ways that we can help ease the often crippling financial strain of student loan debt on recent graduates and also address local workforce needs,” said Senator Peters. “My bipartisan bill would provide much-needed assistance to those seeking to join the workforce while promoting economic development in the communities that need their talent most.”

“A strong workforce is an essential component to the success of our state. I’m proud to put forward a bipartisan solution that incentivizes recent graduates to stay in West Virginia and fill vital workforce needs by cutting burdensome taxes,” said Senator Capito. 

“The Workforce Development Through Post-Graduation Scholarships Act can help Michigan promote economic mobility by attracting and retaining a skilled workforce while mitigating the student debt burden,” said Kyle Caldwell, President and CEO of the Council of Michigan Foundations. “This bipartisan legislation empowers Michigan philanthropy to partner with businesses and government to create pathways to economic stability for individuals and families. The student debt crisis is one of the many pressing issues affecting economic advancement for families and communities across Michigan. The Council of Michigan Foundations is grateful for Senator Peters’ leadership in supporting Michigan’s economic growth through this vital legislation.”

“We’re excited to partner with Senator Peters in supporting post-graduation scholarships like the Come Home program we’ve developed that is bringing the best and brightest workers back to St. Clair County,” said Randy Maiers, President and CEO, Community Foundation of St. Clair County. “These awards are a win-win for our area: they help recipients pay back their student loan debt while putting their training and education to good use.”

"By passing post-graduation scholarship legislation, Congress will make it possible for young people to return to their hometowns after college and ensure that communities across the country can attract a workforce that fits their needs,” Kathleen Enright, President and CEO, Council on Foundations said.

Currently, unlike traditional scholarships, recipients of post-graduation scholarships are required to pay income tax on the grants they receive. Peters’ Workforce Development through Post-Graduation Scholarships Act would:

  • Exclude Post-Graduation Scholarships from Gross Income: The bill would exclude post-graduation scholarships from gross income in the same manner as qualified scholarships. Currently, recipients of any post-graduation scholarship must pay income tax on these grants.
  • Ensure Recipients are Living and Working in a Community in Need: The bill includes language that mandates that any grant distributed must be directly administered to someone living and working in a community that lacks working-age college graduates.
  • Provide Guidelines for Proper Oversight: The bill would give the Department of Treasury rulemaking authority to create anti-fraud rules and reporting requirements to further ensure these post-graduation scholarships, as well as the recipient and the community foundation, are not subject to abuse. It would also direct the Government Accountability Office to conduct a study on the implementation of these grants that focuses on who is receiving them, how long they receive them for, and how much is paid out, among other areas so that the program may be improved to best meet the changing needs of communities.

In the U.S. Senate, Peters has been focused on strengthening and diversifying Michigan’s workforce and ensuring Michiganders can compete in a 21st century economy. In 2018, Peters’ legislation to expand career and technical educationwas signed into law. The legislation strengthens school counselor training and awareness of career and technical education so they can help inform students of post-high school education opportunities outside of the traditional four-year college degree. Peters also recently reintroduced bipartisan legislation to expand opportunities for high school students to obtain college credit in an effort to make higher education more affordable and accessible. In the most recent government funding law, Peters secured $2.9 billion for Workforce Innovation and Opportunity Act State grants as well as $285 million for Registered Apprenticeships. This investment in workforce development activities is expected to increase employment, retention, earnings and occupational skill attainment.