Currently, individuals/joint filers can only deduct $2,500 of student loan interest paid from their taxable income. This figure does not reflect the conservative estimated average student loan debt of $25,000, which, at an interest rate of 5%, generates $6,250 of interest. For student borrowers with even more debt at higher interest rates (many Federal and consolidation loans approach 8%), the amount of interest paid is even greater.
Changing the income tax laws to reflect reality would help struggling parents, students and professionals make ends meet in these difficult times.