Re: Workforce Development through Post-Graduation Scholarships Act (S.1757 / H.R.3582)
Dear Senator Peters, Senator Capito, Representative LaHood, and Representative Sewell:
On behalf of the undersigned organizations, we write to express our appreciation for your leadership on the Workforce Development through Post-Graduation Scholarships Act. This timely legislation would help bring graduates with needed skills back to the regions that need them most while giving foundations an essential tool to support their communities and address the growing student debt crisis.
Communities across the country, particularly in rural regions, are suffering from aging populations, outmigration, and declining dynamism, increasing their demand for individuals equipped with specific and vital skills even as available incentives for those individuals diminish. Simultaneously, total student debt in the United States continues to climb, keeping millions of Americans from realizing their full economic potential while also damaging communities across the country. Excessive student debt prevents individuals from purchasing homes, saving up for retirement, or starting small businesses and reinvesting in local economies.
Post-graduation scholarships offer a solution, helping to address both localized workforce needs and student debt challenges. These scholarships are awarded to graduates with skillsets that are lacking in certain geographies to help pay back some of their student loans. In exchange, the graduates commit to living and working in these communities. This important charitable tool would give graduates with debt a lifeline while attracting them to the communities that need their skillsets—skillsets such as dentistry, nursing, or teaching. However, current law does not treat post-graduation scholarships the same as traditional scholarships, creating unnecessary barriers for foundations looking to support their communities.
Traditional scholarships are recognized as a charitable activity and are excluded from the taxable income of the recipient. This is not the case for post-graduation scholarships, limiting their ability to stimulate regional economic growth and help address the growing student debt crisis. S.1757/H.R.3582 ensures that the worker is not taxed on the post-graduation scholarship they receive, just as they would not be taxed on scholarship money that they received prior to graduation. This vital legislation—which also ensures foundations set residential requirements and other safeguards—would enable philanthropy to be part of the solution.
Foundations that prioritize place-based grantmaking have a profound understanding of their communities’ needs. Your legislation will empower these foundations to be able to make a vital investment in their communities’ workforce needs that will have a lasting impact. We appreciate your leadership, and we are committed to working with you to advance this essential legislation.
