Americans suffering under their student loan debt could be about to lose a major tax break. Currently, you can deduct up to $2,500 in student loan interest from your taxes. This has provided some help to former students digging their way out of the crisis. Sadly, this deductible could be on its way out the door if Republicans get their way.
There are 12.2 million U.S. taxpayers who took advantage of this deduction in 2015. Education advocates are frustrated by the move, saying they believe it will just make the cost of college that much more expensive. On the other hand, Republicans defended their bill claiming the loss will be offset by other benefits in the bill.
The American Council of Education is fighting back. They wrote a letter to the House Ways and Means Committee. This is the group responsible for writing the tax laws.
“It is possible to offer tax relief to hard-working middle-class and lower-income Americans in a way that does not increase college costs and does not make a quality higher education less accessible,” ACE President Ted Mitchell wrote in the letter Monday. “We are eager to work with Congress to enact such legislation, but this bill heads in the wrong direction.”
Justin Draeger, the president of the National Association of Student Financial Aid Administrators, agrees. “It’s going to make student loan borrowing more expensive and as a consequence make higher education more expensive,” he said. The Republicans don’t agree with this sentiment.
Cutting Taxes for Everyone?
The Republicans aren’t taking the opposition of their bill lightly. In fact, they don’t think the $2,500 student loan interest deductible did much at all. While that seems like a big number, the average tax reduction was just $200. Jason Delisle, a conservative who works for the American Enterprise Institute, says the tax bill will help.
“So, if you thought that the student loan interest deduction was good, this bill gives it to everybody and then some,” said Delisle. “They are cutting people’s taxes.” This bill is looking to double the standard deduction to $12,000 for individuals. Couples would receive a $24,000 deduction.
Student Loan Debt a Growing Problem
Student loan debt has skyrocketed in the past decade. Over 44 million Americans owe $1.53 trillion worth of debt. People everywhere are begging the government for some help. This amount of debt ranks #2 compared to all other types. Only mortgage debt is higher. With so many people struggling, this is a crisis that will soon impact the economy.
http://financialhelpers.com/the-government-shutdown-proves-most-americans-financially-unprepared/
Many experts already are blaming millennials for harming the economy. They’re broke thanks to high amounts of student loan debt, so it’s forcing them to put off major life decision. Any kind of break the government can give them in the form of tax relief will be beneficial. Short of working in a service-related industry, there is very little help out there.
