Rand Paul to offer bill allowing families to use 401(k), IRA savings on student loans – Market Watch
Paul, a self-described budget deficit hawk, said Republicans can’t allow Democrats to own the student debt issue
FRANKFORT, Ky. (AP) — U.S. Sen. Rand Paul wants to combat the rising debt load engulfing college students by allowing families to use their retirement savings to pay off their loans.
The Kentucky Republican introduced federal legislation late Monday that would allow students to dip into retirement accounts to help pay for college or make monthly debt payments. Under his bill, individuals could to take up to $5,250 — tax and penalty free — from their 401(k) or IRA each year, and their parents could divert thousands more.
Americans collectively owe about $1.5 trillion in student loans — more than twice the total of a decade ago. On average, last year’s graduates owed about $29,200 each, leaving college with a long-lasting financial burden, Paul said.
“It’s just hard for people to pay back,” he said in a telephone interview with The Associated Press. “Even people with graduate-degree educations are struggling to pay it back over a long period of time. We want to do something to try to help these kids pay off their loans.”