Could New York Provide Student Loan Debt Relief?
A bill currently in committee in the New York State Assembly could bring some relief to New Yorkers struggling with student loan debt payments.
Assembly Bill A5724 as currently written would provide for a personal income tax deduction for student loan payments. It would amend section 612 of the tax law, saying "Payment not in excess of five thousand dollars actually paid by an eligible borrower for student loan repayment, to the extent not deductible in determining federal adjusted gross income and not reimbursed."
In plain terms, eligible borrowers would be able to take a personal income tax deduction of up to $5,000 for student loan payments if the bill were to pass and be signed into law by New York State Governor Kathy Hochul. Any taxpayer who takes out a qualified education loan on their own behalf or on behalf of their spouse or any dependent would be eligible to take the tax deduction.
According to a report by Nick Reisman of Spectrum News, New York student loan borrowers currently owe about $90 billion in debt. While this bill would not outright eliminate that student loan debt, it would help keep money in the pockets of borrowers who may be struggling to keep up with living expenses and exorbitant loan payments.
On the federal level, a report by Ali Vitali, Haley Talbot, Monica Alba and Lauren Egan of NBC News indicates that President Joe Biden is expected to cancel $10,000 of federal student loans per borrower, provided that the borrower is making under $125,000 per year. That report also indicated that President Biden is expected to extend the student loan payment pause for several more months.