Community Corner

Rep. Haddad Sponsors Bill to Make Student Loan Interest Tax Deductible

Haddad made the announcement Thursday.

The following information is provided by Larry Perosino:

State Representative Gregory Haddad (D-Mansfield, Chaplin) is sponsoring legislation that would make interest paid on student loans for college deductible on Connecticut income tax returns. The bill (HB5362) is currently being considered by the Higher Education Committee, of which Haddad is a member, and will be the subject of a public hearing March 6.

“As the cost of a college degree continues to increase and student loan debt has skyrocketed, we must act to ensure that a quality education remains within reach for middle and low income students and their parents,” said Haddad. “Tax deductable student loan interest similar to the federal deduction for a mortgage or equity line would be very helpful for our future leaders.”   

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According to the U.S. Department of Education (DOE), the average debt for graduating seniors with student loans in 2008 was $23,200 – a 24% increase since 2004. DOE also reports that 67% of graduates (1.4 million) took out loans in 2008 – up 27% from 2004.

“The cost of higher education necessitates that most people have to take out loans and that debt is carried well past graduation,” said Haddad, who also serves as Vice-chair of the General Assembly’s Commerce Committee. “Everyone agrees we need to make college more affordable and this tax deduction will help.”

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In 2006, the General Assembly began allowing taxpayers saving for college to deduct contributions to Connecticut Higher Education Trust (CHET) accounts from their Connecticut adjusted gross income. There are also a handful of state loan forgiveness programs for students who meet certain criteria such as earning a specific degree and subsequently working in Connecticut in that field. 


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