Student Loans: Republicans Back Plan to Give Some Borrowers Extra Money
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A Republican congressman is leading a new bipartisan bill in the House of Representatives that would give married student loan borrowers a larger tax deduction on their loans.
Why It Matters
More than 42 million Americans have student loan debt, which has been a sticking point between Democrats and Republicans in recent years.
Former President Joe Biden tried to forgive student loan debt during his time in office, arguing that Americans seeking an education are unfairly punished with decades of debt if they do not come from wealthy families who can afford tuition, but those efforts faced myriad legal setbacks. Critics, on the other hand, have argued student loan forgiveness is unfair to those Americans who have already paid off their debt.
The Student Loan Marriage Penalty Elimination Act, a bipartisan bill introduced by GOP Representative Glenn Grothman of Wisconsin, could make it easier for some borrowers who are married to pay off that debt.
What to Know
Grothman's effort with the bill is joined by fellow Republicans, including Representatives Mary Miller of Illinois, Andrew Clyde of Georgia, Rich McCormick of Georgia, David Rouzer of North Carolina and Michael Rulli of Ohio. Democratic Representatives Suzan DelBene of Washington, Danny K. Davis of Illinois, John Larson of Connecticut and Kevin Mullin of California have also signed on in support.
Currently, student loan borrowers are eligible for a $2,500 tax deduction; but married couples who file their taxes together may only take one deduction, even if both have student loans that would allow them to qualify for it.
Students attend a commencement ceremony at Rutgers University on May 15, 2016 in New Brunswick, New Jersey.
Students attend a commencement ceremony at Rutgers University on May 15, 2016 in New Brunswick, New Jersey.
EduardoThe bill would allow married couples filing a joint tax return to apply the deduction to each spouse, so they'll receive a $5,000 deduction in total, Grothman's office wrote in a statement. Proponents of the bill argue these couples are being financially disadvantaged under the current system.
This would end an "unfair marriage penalty" in the tax code, the statement reads.
It's unclear whether the bill will be brought to a vote, as House Speaker Mike Johnson, a Louisiana Republican, has not weighed in on the legislation. Newsweek reached out to Johnson's office for comment via email.
Meanwhile, the Department of Education (ED) is set to begin garnishing wages of those borrowers who are in default this summer as the Trump administration reverses on Biden's efforts to halt student loan collection.
What People Are Saying
Alan Collinge, founder of Student Loan Justice, told Newsweek: "This is frankly, re-arranging deckchairs on the Titanic. The federal student loan program is now in catastrophic failure, where two-thirds of all borrowers cannot even make payments, and more than half are likely to default. Rep Grothman and the Republicans know full well that standard bankruptcy protections must be returned to these predatory loans, as they exist for all other loans in this country. There is nothing more important if this unconstitutional loan program is to avoid losing all its remaining legitimacy."
Grothman said in a statement: "The federal government has a troubling record of polices that discourage marriage, and the student loan interest deduction is no exception. This is why I'm reintroducing the Student Loan Marriage Penalty Elimination Act to end the unnecessary marriage penalty on student loans that punish marriage and undermine the nuclear family. This is an initial dent on the war the federal government has waged on marriage."
Representative Danny Davis, an Illinois Democrat supporting the bill, said in the statement: "Higher education is a critical path to economic security. Unfortunately, Americans collectively struggle under $1.77 trillion in crushing student loan debt, with an average $38,375 in federal student loans. I am proud to join my colleagues in leading this bill that would double the student loan interest deduction for married couples filing jointly. Congress must take every opportunity to ease the heavy financial burden on student loan borrowers."
What Happens Next
It's yet to be seen how much support the new bill will receive, but it does have some bipartisan support that could provide some relief for borrowers if passed.
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