DiMario wants to help with student debt
“Student loan debt is a burden facing so many of our young professionals, and having a program established to assist them will allow the state and its employers to quickly put available workforce development dollars from any source to effective use to attract and retain much-needed talent,” said Senator DiMario (D-Dist. 36, Narragansett, North Kingstown, New Shoreham).
“In
the short term this could address our state’s health care staffing crisis by
helping to recruit and retain professionals in high-demand areas, including
primary care providers and mental health practitioners, but it would work
equally well for other sectors of our workforce that might experience shortages
in the future. Additionally, administering this program through the
existing Rhode Island Student Loan Authority cuts down on administrative costs
for the state by reducing duplicative programs and means that participants
could maximize their repayment and tax benefits.”
The bill (2026-S 2662) would establish a fund under the
administration of RISLA to provide loan-repayment assistance to workers in
high-need professions who have committed to work full-time in their profession
for a prescribed term of service.
The loan repayment funds would be distributed to the eligible employee through their employer’s section 127 educational assistance program. Section 127 is a federal tax incentive that allows employees to receive up to $5,250 per year through their employer tax-free to go toward qualified education expenses, including tuition, books, supplies and equipment, as well as qualified education loans. This amount is indexed to rise with inflation.
To qualify for section 127, loan repayment plans must be in
writing and meet certain eligibility requirements.
Under the program, the Rhode Island Department of Labor and
Training would determine which professions qualify as high need by identifying
occupations with a critical workforce shortage within the state. The program
could be utilized by both public and private sector employers who want to
establish and fund loan repayment programs to recruit and retain employees in
high-need fields.
Senator DiMario stressed that the program, which is designed
to respond to the changing federal landscape of student loan repayment plans,
would remain useful beyond the current shortage in medical professionals.
“This program would allow the state to flexibly and
proactively address future workforce shortages through targeted loan
repayment, rather than having to play catch-up as we are currently doing with
health care,” said Senator DiMario. “Having a system that we can quickly ‘turn
on’ and adjust if the need arises is far more effective than having to build a
new system for each new challenge.”
