May 2005

Bill to ease student loan burden introduced into Congress

The American Chiropractic Association (ACA) and Association of Chiropractic Colleges (ACC) are working together to promote the passage of legislation that would make favorable tax changes in student loan interest deductibility. The changes would ease the burden of loan repayment and to help make higher education more affordable and available.

The ACA-ACC supported legislation, H.R. 1380, known as the Higher Education Affordability and Equity Act of 2005 (HEAEA), was recently introduced in the House of Representatives by Congressman Phil English (R-Pa.), member of the House Ways and Means Committee.

The act would expand the student loan interest deduction to allow borrowers to deduct the full amount of interest on their student loan. It would also increase the income eligibility to claim the deduction. Currently, those who have a salary of $50,000 can deduct the full $2,500 in interest, and as salary increases, the amount the borrower can deduct decreases.

After $65,000, the borrower can deduct no interest. In the proposed legislation, the salary level was raised to $100,000 to be able to deduct the full $2,500. The bill will also increase allowable contributions to education savings accounts and allow room and board to be treated like tuition scholarships for tax purposes.

Source: American Chiropractic Association, www.acatoday.com

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