[Congressional Record Volume 145, Number 43 (Thursday, March 18, 1999)]
[Extensions of Remarks]
[Page E494]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  INTRODUCTION OF LEGISLATION TO EXPAND THE TAX DEDUCTION FOR STUDENT 
     LOAN INTEREST PAYMENTS: ELIMINATING THE 60-PAYMENT RESTRICTION

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                           HON. GEORGE MILLER

                             of california

                    in the house of representatives

                        Thursday, March 18, 1999

  Mr. GEORGE MILLER of California. Mr. Speaker, today I am introducing 
legislation on behalf of myself, and Representatives Johnson (of 
Connecticut), Matsui, and English, to expand the student loan interest 
payment tax deduction.
  As a college education becomes both increasingly expensive and 
increasingly important in getting a job and being a productive and 
active participant in our democratic society, we must continue to look 
for ways to help students pay for tuition and related educational 
expenses.
  As a part of the Tax Payer Relief Act of 1997, the interest paid on 
student loans became eligible for an ``above-the-line'' deduction on 
Federal income taxes. This tax provision is just beginning to provide 
needed relief to many student borrowers.
  However, under current law, only the first 60 loan payments are 
eligible for the deduction. Because student loan payments are typically 
made monthly, this means that students can deduct interest payments on 
their taxes for only 5 years of repayment, not including time periods 
spent in either forbearance or deferment.
  Our legislation would simply lift the 60-payment restriction and 
allow borrowers to deduct interest payments for the entire period of 
repayment.
  Extending the time limit on the tax deduction is one of the most 
direct and straightforward changes we can make in current law to 
relieve the increasing burden of student loan debt. Loans now comprise 
60 percent of all postsecondary student aid, compared to just 45 
percent 10 years ago.
  Our legislation will be particularly helpful to students with high 
loan debt and those who choose to pay over longer periods. The latter 
group includes those who choose ``income contingent repayment,'' that 
is those who make smaller payments over a longer period of time, 
especially those who maintain a commitment to lower-paying public 
service occupations.
  Eliminating the 60 payment period also will ease difficult, 
confusing, and costly reporting requirements currently required for 
both borrowers and lenders. Thus far, these reporting requirements have 
proved so difficult that the IRS has already relaxed the rules for 
reporting during the 1998 tax year.
  I look forward to working with my colleagues to pass this important 
legislation.

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