Today, tax payers are able to deduct up to $2,500 of the interest paid on student loans on your federal tax return.The Tax Relief Act of 2010 extended the student loan deduction through 2012. After 2012, the deduction will revert to a previous tax law where interest is deductible only for the first 60-months of repayment. The amount the deduction is phased out if your modified adjusted gross income is between $55,000 and $70,000 ($110,000 and $140,000 married filing jointly)
These limits have not been raised since 2001, but student loan debts have increased dramatically. There is also a significant marriage penalty with this deduction. I would propose raising the limit to $5,000 and $10,000 for married filing jointly for the life of the loan to provide tax relief to working people.
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