Wed October 16, 2013
Bill Would Give Tax Breaks To Residents With Student Loans
Two Democratic state legislators are introducing a bill this week that would grant tax breaks to Wisconsin residents paying student loans.
It would also set up a state authority that could refinance student loans at lower interest rates.
The authors of the bill say there are more than 700,000 Wisconsin residents paying student loans and that the average loan debt for students over the past decade has risen to more than $20,000. The proposal would allow student debtors to deduct up to $6,500 of their student loan payments annually from their state income tax and the opportunity to refinance their loans.
At a news conference announcing the bill, former student Sarah Graves says that's the kind of relief recent graduates like her need.
“We’re able to re-finance homes, re-finance cars, cancel memberships, transfer credit card debt, clip coupons for our groceries,” she says. “But student loans – one of the largest monthly expenditures for most of us – seems untouchable, inflexible and almost out of our control.”
The bill, if passed, would allow the state to sell bonds and use the money to help students refinance student loans. Sponsor Rep. Cory Mason (D-Racine) says he's hopeful the tax credit aspect of the bill will win it support from the Republican majority.
“We heard lots of promises from our colleagues on the other side of the aisle that they would look at any real proposal that would offer substantial tax relief to the middle class,” says Mason. “So I'm hoping they look at this as a real and substantial proposal to do just that.”
Mason says the bill also requires colleges and universities to provide loan counseling to students before they borrow the money.
Correction: The original version of this story said that Rep. Cory Mason represents Milwaukee. He actually represents Racine.