[Congressional Record (Bound Edition), Volume 148 (2002), Part 4]
[Extensions of Remarks]
[Page 5488]
[From the U.S. Government Publishing Office, www.gpo.gov]




 INTRODUCING THE TAX EXEMPTION FOR MILITARY STUDENT LOAN REPAYMENTS ACT

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                          HON. GARY G. MILLER

                             of california

                    in the house of representatives

                        Tuesday, April 23, 2002

  Mr. GARY MILLER of California. Mr. Speaker, today, I am introducing 
the ``Tax Exemption for Military Student Loan Repayments Act.''
  Today's military requires more high-tech skilled personnel than ever 
before and the military continues to have a dire need to recruit for 
its shortage of medical personnel. To fill these jobs known as military 
occupational specialists or MOSs, the Army, Navy and Air Force utilize 
student loan repayment programs to attract skilled recruits who have 
gained high-tech, medical, or other valuable skills, but may be 
hesitant to join the military because they have incurred substantial 
indebtedness to finish their college education.
  The military student loan repayment program remains popular among 
military officials because it targets a growing population of people 
with skills that the services can use. Unfortunately, these payments 
made towards student loan debt are considered taxable income although 
these payments are made directly to the student loan creditor, and the 
soldier, sailor, or airman never sees these payments reach their 
wallets. As a result, unless the military person requests additional 
funds to be withheld from their pay, they will in most cases owe a 
significant amount in taxes for each year repayments are made.
  Having to pay taxes on this important recruitment incentive reduces 
the effectiveness of the program, which is designed to attract highly 
skilled military personnel to fill critical military occupational 
specialities. Further, the taxation of these payments seems to place an 
overly burdensome tax on the pay of military personnel who must already 
contend with a 7.6% military to civilian gap in pay. To enhance these 
recruitment efforts and deliver tax relief to military personnel, the 
``Tax Exemption for Military Student Loan Repayments Act'' will amend 
Section 134 of the Internal Revenue Code of 1986 to exclude the 
military's student loan repayment from taxable gross income.
  Mr. Speaker, I urge my colleague to support this legislation, which 
will enhance the military's effort to recruit highly skilled personnel, 
deliver tax relief to our underpaid men and women in uniform, and make 
the military a more viable option for people who wish to serve their 
country but are weighted down by their student loan debt.

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