In 2013 student loan interest deductions were phased out at MAGI levels between $60k to $75k. Above $75k one can no longer claim this deduction. This MAGI figure is set for everyone in the country equally, while the cost of living varies wildly, for example in the New York or San Francisco metro areas the cost of living is much higher than in the mid west.
The proposal is to raise the MAGI cut off values in areas based on the cost of living in those areas. The IRS can use the already established COLA values that are established by the government for per diem or allowances. The MAGI caps should be tied to zip code of residence.