FRANKFORT, Ky. (AP) — U.S. Sen. Rand Paul wants to combat the rising debt load for college students by allowing them to dip into retirement accounts to help pay for school or pay back loans.
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The Kentucky Republican is introducing federal legislation to allow individuals to take up to $5,250 — tax and penalty free — from their 401(k) or IRA each year to help pay for college or pay down student loan debt.
Parents or spouses could divert money from retirement accounts to help.
Americans collectively owe about $1.5 trillion in student loans.
Paul sees his bill as a step forward to deal with the problem. He says it’s important for Republicans to offer a plan to relieve student debt.
His bill is called the Higher Education Loan Repayment and Enhanced Retirement Act.