(TRENTON) – An Assembly panel on Monday approved legislation sponsored by Assemblywoman Annette Quijano (D-Union) to help alleviate the burden of high student loan debt.
The bill (A-4259) would provide taxpayers a credit against the New Jersey gross income tax for interest paid on student loans attained via a student loan program, a federal loan program or a commercial lender. It was approved by the Assembly Higher Education Committee.
“Many of our college students are graduating with enormous student loan debt and few job prospects,” said Quijano. “This bill would help ease the financial burden not only for new graduates struggling to find their financial footing, but those graduates who continue to make student loan payments long after they left school, and could use some relief in this stagnant economy. Our nation is competing with others countries and it is paramount that we have an educated workforce. This bill helps towards that effort by offsetting the cost of school.”
Under the bill, the allowable tax credit is equal to 100 percent of any interest paid by the taxpayer during the taxable year on a loan which is:
- secured through a state student loan program, a federal student loan program, or a commercial lender
- obtained and expended exclusively for purposes of paying the tuition and fees and other expenses, such as room and board and books and supplies, related directly to the enrollment of the taxpayer, the taxpayer’s spouse or partner, or the taxpayer’s dependent at a college or university or an accredited post-secondary business, technical, trade, or vocational school.
“The burden of repaying student loan debt is not only shouldered by graduates, but often parents or spouses who may be helping repay those loans,” continued Quijano. “In a time when most taxpayers are carefully watching their spending, this tax credit will help give them some breathing room.”