Student debt affects approximately 45 million Americans, and the bill takes several targeted steps to ease the burden without implementing broad forgiveness. The changes are incremental but meaningful for borrowers in specific situations.
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Interest Deduction Restoration
The student loan interest deduction is fully restored after its 2017 modification and the income cap is raised. Single filers earning up to $90,000 can now claim the full deduction. The deduction is also made available above-the-line again.
Core Takeaway
If you are repaying student loans and earn under the new threshold, update your tax withholding or estimated payments to account for the deduction. At a 22% marginal rate, the full $2,500 deduction is worth $550 in reduced tax liability annually.