(The Center Square) – A proposed deduction on income taxes for student loan interest recently moved one step forward in Pennsylvania.
The House Finance committee voted 24-1 to send House Bill 219 to the chamber floor.
The bill was amended to clarify language and cap the interest claimed at $2,500. The deduction mirrors the credit provided at the federal level.
Legislators estimate that over 450,000 Pennsylvanians claim this deduction on their federal taxes and will benefit from the bill. Those who qualify for the deduction, they expect, will receive about $70 back in their pocket at tax time.
Pennsylvania graduates carry the third highest debt load in the nation and are sixth in the number of students graduating with debt. Over $2 million Pennsylvanians hold an average of over $39,000 in student debt. Among them, rural students and students of color are disproportionately represented.
While tuition and debt have skyrocketed, income has not. Supporters note that tuition rose by 47% in 20 years, while the median household income rose by only 13%, creating a gap that has pushed more and more students into taking on increasingly high loans.
Opponents of the bill during committee cited support for its intention – relieving some of the massive financial burden experienced by students and graduates dealing with high tuition costs – but show concern for the sum total of tax relief efforts and its impact on the state’s coffers.
