State PIRGs' Higher Education Project
218 D Street SE
Washington, DC 20003
(202) 546-9707

Director:
Ivan Frishberg

Advocate:
Ellynne Bannon

 

May 25, 2001

Urge Congress not to cut the $33 billion higher education package in the final tax bill

Call your Senators today and urge them not to cut the $33 billion higher education package from the final tax bill. The Senate passed a $1.35 trillion tax bill earlier this week that included several student aid provisions. The package would:

  • Expand the current loan deduction to $5,000 by 2004. This provision would also raise the income cap eligibility to $65,000, and $130,000 for married couples filing a joint return.
  • Eliminate the current 60-month limit during which interest paid on student loans is deductible.
  • Increase the annual limit to contributions to education IRAs (Individual Retirement Accounts) from $500 to $2,000.
  • Permit borrowers to take a tax credit of up to $500 against taxes they would owe on the interest of their student loan during the first 60 months in which interest is which interest payments are required.
  • Expand the current definition of "qualified tuition program" to included certain prepaid tuition programs established and maintained by one or more eligible educational institutions.
  • Expand current law that defines education expenses paid by an employer for its employees as deductible by the employer to graduate education and makes the exclusion permanent.

Proposals such as the elimination of the 60-month limit on student loan interest deduction and the tax credit on student loan interest paid are important in helping student borrowers repay their debt.

Action:

Call your Senators today and urge them NOT to cut the $33 billion higher education tax package. Also, urge them NOT to cut any of the specific programs such as the loan benefits and section 127.

It is especially important for you to call if your Senator is one of the following key moderates: Breaux (D-LA), Landrieu (D-LA), Chaffee (R-RI), Lincoln (D-AR, Jeffords (R-VT), Toricelli (D-NJ), Specter (R-PA), Feinstein (D-CA_, Smith (R-OR), Snowe (R-ME), Collins (R- ME), Miller (D-GA), Kohl (D- WI), McCain (R-AZ) and Carnahan (D-MO).

Call your Senators by using the student aid hotline 1 (800) 574-4AID.
Senate Switchboard: (202) 224-3121