Goldman, Jacobs Introduce Legislation to Provide Relief to Student Loan Borrowers

February 12, 2026

The Average New York State Borrower Owes $38,000 In Student Loans

Trump Administration Has Rolled Back Biden-Era Repayment Programs, Making It More Difficult For Borrowers To Pay Down Their Debt

Washington, D.C. - Today, U.S. Representatives Dan Goldman (NY-10) and Sara Jacobs (CA-51) introduced the Generating Relief for Academic Debt Using Assisted Tax Efficiency (GRADUATE) Act, legislation that would allow student loan borrowers to deduct their student loan payments, including accrued interest, from their taxable income. The student loan interest tax deduction has not been raised since 2001, while borrowing costs have risen unsustainably for students nationwide. The GRADUATE Act addresses the student loan crisis by enacting a long overdue increase of the current $2,500 tax deduction benefit for student loan interest payments and expanding coverage for payments towards the loan principal. Reps. Robert Garcia (CA-42), Eleanor Holmes Norton (DC-AL), Shomari Figures (AL-02), and Chellie Pingree (ME-01) cosponsor this legislation.

“Student loan debt is crippling young people,” said Rep. Goldman. “As the Trump Administration makes it harder for borrowers to tackle their debt, and consequently leaves them less likely to become homeowners, start a family, or save for retirement, we need to take immediate action. This legislation makes a long overdue update to the student loan interest tax deduction and helps ensure that graduates seeking the American Dream can pay off their loans and build a successful life.”

Rep. Sara Jacobs said, “Millions of people – especially Millennials – can’t afford to have kids, buy a home, or start a business because of their crushing student debt from decades earlier. And unfortunately, President Trump has taken away the few levers that people had for relief, worsening this crisis even more. That’s why I’m proud to co-lead the GRADUATE Act, which would allow borrowers to deduct their student loan payments from their taxable income, so they can pay off their debt and achieve their goals faster.”

The student loan debt crisis gripping Americans has exploded over the last three decades, with nearly 43 million borrowers owing a total of $1.8 trillion in debt. Student loans are the second largest source of consumer debt in the country— driven by rising tuition costs, cuts to education spending, and financial aid that has not kept pace. Rising out-of-pocket costs for student borrowers increases the barriers to higher education and burdens them long after graduation, making it more difficult to purchase a home, start a family, save money for retirement, start a small business, and may even lead to default. Ensuring higher education remains affordable and accessible to all in the United States is an economic imperative. College education is a key driver of economic mobility and keeping it unaffordable for historically underrepresented and underserved students only exacerbates existing economic inequality.

The Trump Administration has made it more difficult for student loan borrowers to tackle their debt. Under Trump, the Department of Education (ED) eliminated the Biden-era income-driven repayment plan, known as the SAVE Plan, which was the most affordable loan repayment plan ever. The ED has also moved to begin forcing the collection of debt from people who defaulted on their student loans, including via wage garnishment while also moving to limit student loan forgiveness through the Public Service Loan Forgiveness Program (PSLF).

The student loan interest tax deduction has not been raised since 2001, while borrowing costs have risen unsustainably for students nationwide. The GRADUATE Act addresses the student loan crisis by enacting a long overdue increase of the current $2,500 tax deduction benefit for student loan interest payments and expanding coverage for payments towards the loan principal.

The GRADUATE ACT would allow student loan borrowers to deduct their student loan payments (including accrued interest) from their taxable income. The amount they can deduct will depend on their gross taxable income level:

Those who earn up to $125,000 per year would be able to deduct their student loan payments (both payments to principal and accrued interest) up to $10,000.
The amount that borrowers can deduct will phase out between incomes of $125,001 per year and $150,000 per year
For every child or dependent, borrowers can deduct an additional $500.
Payments for both public and private loans would be eligible.

The GRADUATE Act is endorsed by the National Education Association, the American Federation of Teachers, and Protect Borrowers.

AFT President Randi Weingarten said: “The Trump administration and congressional Republicans have spent the past year making college less affordable and less accessible. We have sued countless times, and despite our settlement forcing them to act, they have refused to process student loan relief, as well as gutting the Public Service Loan Forgiveness program and enacting the big, ugly bill that cuts $300 billion from higher education and more. Policymakers should be looking at ways to help, not hurt, borrowers who pursue college to achieve their dreams but who, instead, are thrust into a recurring nightmare. That is what the GRADUATE Act does, quadrupling the student loan interest deduction and providing some sorely needed relief to the tens of millions of Americans shackled with $1.7 trillion in student debt. The bill has our full support.”

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Issues:CongressEducation