GRADUATE Act
Summary
What This Bill Does
This bill changes the Internal Revenue Code student-loan deduction from an interest-only deduction into a broader education-loan payment deduction. Individuals could deduct amounts paid during the taxable year on qualified education loans, capped at $10,000 plus $500 for each dependent. The deduction phases down when modified adjusted gross income exceeds $125,000, or $250,000 for joint returns, over a $25,000 range, or $50,000 for joint returns. It updates inflation references from 2001 to 2025, changes the above-the-line deduction reference in section 62, and applies to taxable years beginning after December 31, 2025.
Who Benefits and How
Student loan borrowers, graduate borrowers, taxpayers with dependents, and joint filers benefit from a larger deduction that can cover principal as well as interest and has higher income thresholds than the old student-loan interest deduction.
Who Bears the Burden and How
The Internal Revenue Service must update forms, instructions, inflation adjustments, and compliance systems. Federal taxpayers bear revenue costs from the larger deduction, and loan servicers may see more borrower demand for payment documentation.
Key Provisions
- Amends section 221 from an education-loan interest deduction to an education-loan payment deduction.
- Expands deductible qualified education loan payments to include principal and interest up to $10,000 plus $500 per dependent.
- Raises income phaseout thresholds to $125,000 for single filers and $250,000 for joint returns.
- Applies the expanded deduction to taxable years beginning after December 31, 2025.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Expands the tax deduction for qualified education loan payments by allowing deduction of principal and interest payments up to $10,000 plus $500 per dependent, with higher income phaseouts after 2026.
Key Policy Areas
Education, Tax, Financial Services
Primary Purpose
Expands the tax deduction for qualified education loan payments by allowing deduction of principal and interest payments up to $10,000 plus $500 per dependent, with higher income phaseouts after 2026.
Policy Domains
Substantive provisions
Identified Gains
- Student loan borrowers
- Graduate borrowers
- Taxpayers with dependents
- Joint tax filers
Identified Costs
- Internal Revenue Service
- Federal taxpayers
- Student loan servicers
Sponsors
Legislative Progress
In CommitteeReferred to the House Committee on Ways and Means.
Introduced in House
Mr. Goldman of New York (for himself, Ms. Jacobs, Mr. …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Internal Revenue Service, Taxpayers, Taxpayers with dependents
Positive-direction: Taxpayers with dependents
Negative-direction: Internal Revenue Service, Taxpayers
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "secretary"
- → Secretary of the Treasury
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology