Construction seen at Concordia University where students are currently graduating with the most student debt in Oregon.
With the average college student in Oregon graduating with $16,453 in student loan debt, state lawmakers are trying to ease the burden on their constituents with a new student loan bill. Senate Bill 1034, which was introduced last week, would allow residents with federal and private student loans to deduct all of the interest and principal paid throughout the year from their taxable state incomes.
The bill would cover anyone helping a student make monthly student loan payments including parents, grandparents, and employers. Currently, an existing federal rule permits taxpayers to deduct annual interest payments on student loans of up to $2,500 depending on annual income, but it does not include principal payments on student loans, just interest.
While Oregon is in the middle of the average student loan debt per graduate state rankings at 24th, some of its graduates are leaving school with an impressive amount of debt. Right now, students at Concordia University are graduating with the most student debt, an average of $25,562, while those at Reed College have the lowest at a little more than $10,000.
Similar bills that would give tax breaks to student loan borrowers are currently making their way through Congress on Capitol Hill. The most similar bill, called H.R. 795, would allow employers to contribute up to 5,250 of tax free dollars towards employees’ student loan debt. Other bills have been created to eliminate hidden taxes associated with student loan forgiveness as well as allowing borrowers to use 529 plan funds for student loan repayment.
Image Copyright © Concordia University Portland