Student loan debt now stands around $1.4 trillion, impacting more than 43 million people in the U.S. alone. As it becomes more of a hotbed issue across the country, lawmakers are trying to come up with new ways to reduce the often crippling burden.
Take some of the politicians in Oregon. With college graduates in the state owing $26,968 in student debt on average, lawmakers introduced Senate Bill 1034, dubbed the Millennial Education Act, that could provide some relief come tax time.
The bipartisan bill was introduced by state Senator Chuck Thomsen, a Republican, and co-signed by Peter Courtney, a Democrat and president of the Oregon Senate. It would enable residents of Oregon with federal or private loans to deduct the total interest and principal paid on their student loan throughout the tax year, thus lowering their taxable income. The law expands on legislation already in the books that enables taxpayers to write off their annual interest payments up to a maximum of $2,500. This new proposed tax break would apply to any resident of Oregon with a student loan as well as their parents, grandparents, employer, or anyone helping the student loan borrower with their payments each month.
“It is easy to lob out rhetoric about how to help students with debt. I read and hear that all the time. This to me, actually puts us on course to a solution. The Millennial Education Act will bring businesses and Millennials together to fix the significant problem of student debt,” Thomsen said when introducing the legislation. “These are our children and grandchildren, they are between a rock and a hard place: burdensome student debt and a burdensome tax code. By helping graduates pay off student debt we are helping every generation.”
The two senators from Oregon aren’t the only lawmakers to introduce bipartisan legislature this month aimed at helping borrowers get out from under the often crushing debt. U.S. Reps. Rodney Davis, a Republican from Illinois, and Rep. Scott Peters, a Democrat from California, introduced new legislation that encourages employers to pay down a portion of their employees’ student debt. Called the Employer Participation in Student Loan Assistance Act, H.R. 795 would enable companies to provide their employees with tax-free contributions towards student debt. The lawmakers likened it to the now ubiquitous 401(K) plan used by nearly 80 percent of workers. “Seven in ten college seniors last year graduated with student loan debt – which now represents the second highest form of consumer debt,” said Davis when announcing the legislation.
Author: Donna Fuscaldo
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