Any reader of this blog can tell you that I often put up notes and updates about my student loans. Well, there is more that I do in the student loan world besides complain about my lenders or celebrate small successes. In fact, one of the things that I try to be active about is advocating for better federal legislation to help those who are in serious student loan debt.
There is a national organization called the Project on Student Debt who is really the leader in this field. They’ve helped advocate for so many beneficial new programs for student loan borrowers, not the least of which is the new public service forgiveness program that will help thousands of high debt graduates. One of the initiatives that they publicly advocate for on their website is the possibility of making student loan interest a federal tax credit as opposed to an income tax deduction; coupled with this is increasing the amount that could be credited from the current $2,500 to up to $4,000.
I recently asked the good folks over at the Project on Student Debt for an update on this initiative and this is their reply:
I’m not aware of any major progress on this. Congress is pretty focused on the budget process right now, which includes a different tax credit (for tuition). We’ll keep our email subscribers updated if anything changes, but right now I’m not aware of a legislative vehicle in the works that could move this forward in the short-term.
First and foremost, if you are interested in getting updates on student loan legislation, I encourage you to sign-up for their e-mail list (which you can do by clicking here). Second, it is a real shame that the federal tax credit for student loan interest has no champion in the Congress right now. This could be a crucial piece of legislation that has the potential to ease some of the burden that many high debt student loan borrowers are faced with due to their education.
If this initiative ever gained steam and passed Congress, it would save many high debt student loan borrowers (*cough* like me *cough*) a great deal of money in the long-term. Personally, I’d like to see the total amount of student loan interest that could be credited increased to a higher dollar amount like $10,000 per year. At that level, almost all student loan borrowers would fall within the program’s guidelines.