ABA voices opposition to elimination of school loan interest deduction in Tax Cuts and Jobs Act
In response to a tax bill proposal to eliminate student loan interest deductions, the American Bar Association has asked that they be kept in place.
“Of particular interest to the American Bar Association is the powerful financial disincentive for law students to enter the important function of public service in our society. The deduction of interest on law school loans helps recent graduates to accept lower-paying, public-service jobs that they might not otherwise be able to afford,” reads a Nov. 28 letter (PDF) signed by Thomas M. Susman, director of the ABA’s governmental affairs office. The letter was sent to Kevin Brady and Richard E. Neal, the chairman and ranking member, respectively, of the U.S. House Committee on Ways and Means; and Orrin G. Hatch and Ron Wyden, the chairman and ranking member, respectively, of the U.S. Senate Committee on Finance.
“The cost of higher education in the United States has steadily increased each year while the relative availability of financial assistance in the form of grants and scholarships has decreased,” the letter reads. “Consequently, many students cannot afford higher education without borrowing substantial amounts of money, often hundreds of thousands of dollars.”
Republican U.S. Senate and House members say that the Tax Cuts and Jobs Act will reduce taxes for middle-income Americans by lowering tax rates and increasing the standard deduction, CBS News’ Money Watch reports. The bill proposes to eliminate an annual tax deduction of up to $2,500 for individuals with annual income of no more than $65,000, or couples with joint income of no more than $130,000, according to the article. Money Watch reports that approximately 13.4 million Americans claimed this deduction.
College presidents have been surprised by the proposal and fear that if the bill becomes law, losing student loan interest deductions would make higher education more unattainable for low- and middle-income families, Politico reports.
Jason Delisle, a resident fellow with the American Enterprise Institute, a Washington, D.C.-based market-oriented think tank, told Politico that few Americans care about what the tax bill would mean for colleges and graduate students.
“Very few [Americans] are privileged enough to get a graduate degree from an elite institution. I think they’re like, ‘Complain all you want.’ It’s just not going to resonate with Main Street America.” According to his website bio, Delisle himself has a master of public policy degree from George Washington University.