GRADUATE Act
Rep. Goldman's GRADUATE Act Would Expand Student Loan Tax Deduction to $10,000 Under House Review
Legislative Progress
Key Points
- This bill, introduced by Representative Goldman, would change the tax rules to let people deduct both the interest and the principal they pay on student loans. Currently, the law only allows a tax break for the interest portion of a loan payment.
- The new rules would allow most borrowers to deduct up to $10,000 of their total loan payments from their taxable income. Families would also get an extra $500 deduction for every dependent they claim, such as a child.
- The full tax break would be available for individuals making up to $125,000 a year or married couples making up to $250,000. People earning more than those amounts would see the size of their deduction gradually decrease.
- This change is designed to help people pay off their student debt faster by lowering their yearly tax bill. It recognizes that paying back the actual loan amount is just as much of a financial burden as paying the interest.
- If Congress passes this bill, the new tax benefits would begin for the 2026 tax year. This would give the government and taxpayers time to prepare for the change in how education expenses are reported.
Impact Analysis
Personal Impact
Life & Work
Current students who are already making payments on existing student loans (such as graduate students or those who returned to school) would benefit from the expanded deduction. Additionally, current students can plan ahead knowing that when they graduate, their future loan payments — both interest and principal — could be tax-deductible up to $10,000 per year, easing the financial burden of taking on education debt.
Programs
Milestones
Referred to the House Committee on Ways and Means.
Introduced in House
The bill was officially filed and given a number. It now enters the legislative queue.
Votes
No votes have been recorded for this legislation yet.
Source Information
Document Type
Congressional Bill
Official Title
GRADUATE Act
Data Sources
Sponsor
Cosponsors
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