Bill > HR7536

This bill, known as the GRADUATE Act, proposes to expand and increase the tax deduction for student loan payments. Currently, the deduction under Section 221 of the Internal Revenue Code of 1986 only applies to the interest paid on qualified education loans. This bill would amend that section to allow individuals to deduct not only the interest but also the principal payments made on these loans. Furthermore, it significantly increases the maximum annual deduction to $10,000, plus an additional $500 for each dependent a taxpayer has, a substantial increase from previous limits. The bill also adjusts the income thresholds at which this deduction begins to phase out, with the phase-out starting for individuals earning over $125,000 (or $250,000 for those filing jointly) and fully phasing out at $150,000 (or $300,000 for joint filers). The term "modified adjusted gross income" refers to a taxpayer's adjusted gross income with certain deductions and income sources excluded or included for the purpose of this calculation. These changes are set to take effect for taxable years beginning after December 31, 2025.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/7536/all-info