Washington, D.C. – Today, Reps. Terri Sewell (AL-07) and Darin LaHood (IL-18) introduced bipartisan legislation to boost post-graduation scholarships and strengthen workforce recruitment in rural America. The Workforce Development Through Post-Graduation Scholarships Act of 2021 would amend the Internal Revenue Service Code to exclude certain post-graduation scholarship grants from being treated as gross income which will alleviate student loan debt, help businesses attract and recruit talent, and boost economic growth in local communities.

“By attracting talented workers to jobs in Alabama’s rural and underserved communities, post-graduate scholarship grants play a critical role in boosting local economic growth and fostering prosperity, all while alleviating the burden of student debt,” said Rep. Sewell. “I’m proud to be introducing this legislation, which will ensure that these awards are effective tools for businesses and workers in Alabama’s 7^th District.”

“In our modern economy, it’s essential we recruit talent into our workforce in underserved and rural communities and provide workers with the resources they need," said Rep. LaHood, lead Republican co-sponsor. "Our legislation will alleviate the growing student debt, foster economic growth, and help organizations attract better talent and reward professionals who commit to their local communities."

A post-graduation scholarship is a type of charitable grant made by foundations to attract individuals with certain career skills to a given region. It functions much like a traditional scholarship but would pay off a portion of student loans held by an individual who has already completed a degree or technical program.

Much like a traditional scholarship, the issuing foundation would establish appropriate eligibility requirements and put in place a process to verify that those requirements continue to be met through the duration of the scholarship award agreement. For example, a foundation that is looking to attract nurses or doctors to a community facing a shortage of qualified health professionals could award a post-graduation scholarship to a recipient but require that an individual live and be employed within a range of ZIP codes for a set number of years. 

The Workforce Development Through Post-Graduation Scholarships Act of 2021 would amend the Internal Revenue Service Code to exclude certain post-graduation scholarship grants from being treated as gross income which would increase the effectiveness of these awards by reducing the burden of student debt and boosting economic growth.

The bill already enjoys broad support from across the philanthropic sector.

“The student debt crisis is damaging the financial futures of American students and families," said Kathleen Enright, President & CEO of the Council on Foundations. "For rural communities where it can be more difficult to attract or retain people with the skills to fill needed jobs, post-graduation scholarships are a great incentive for recent graduates to come back home or move to places they may not have previously considered. The Workforce Development Through Post-Graduation Scholarships Act provides foundations with tools to help attract talent to meet the needs in their communities. This legislation is a result of years of collaboration between members of Congress and philanthropic leaders, and I urge Congress to send this bill to the President’s desk to sign into law immediately.”

Companion legislation was introduced in the U.S. Senate by Sens. Shelley Moore Capito (R-WV) and Gary Peters (D-MI).