SB 477 would provide up to $1,000 per year in relief
SACRAMENTO – With student loan debt climbing to more than $1.5 trillion nationally and graduates trying to pay for everyday expenses while simultaneously paying down student loans, State Senator Bob Wieckowski’s (D-Fremont) SB 477 was overwhelmingly approved by the Senate Governance and Finance Committee today.
“SB 477 will provide meaningful relief to the 3.7 million Californians paying off student debt by giving them up to a $1,000 tax credit for yearly interest paid on their outstanding student loans,” said Wieckowski, a member of the Senate Budget and Fiscal Review Committee, and a bankruptcy attorney. “Rather than fully engaging in our economy, far too many graduates are putting off purchasing a townhome, a new car or getting married because they are burdened by student debt. This debt is disproportionately born by women, students from low-income families, students of color, and first-generation college students. They have less disposable income to repay their loans, requiring more time to pay them off and continued accrual of interest. In proving this credit, SB 477 recognizes the costs Californians have incurred in pursuing higher education.”
SB 477 would provide a student loan tax credit for the entire amount of interest a person paid on their student loan throughout the year. The credit is capped at $1,000 and is limited to individuals earning up to $100,000 in adjusted gross income and couples earning $200,000. The bill has a five-year sunset and would cover the years 2019 to 2023.
A 2015 Public Policy Institute of California report projected the state will fall 1.1 million college graduates short of economic demands if current trends continue. This workforce skills gap is unlikely to be eliminated by the arrival of highly-educated workers from elsewhere, according to the report.
“We have a choice to make. Do we want to give highly educated people in the state an incentive to remain in California and use their skills here by providing meaningful relief with this bill? Or do we stand by and watch these young minds leave for a higher quality of life elsewhere due to the crushing combination of student loan debt and California’s high cost of living and lack of affordable housing?” said Christopher Long, an associate attorney with Sheppard Mullin, who testified in support of the bill and described his personal experience with student debt and qualifying to purchase a home.
SB 477 now heads to the Senate Appropriations Committee.
Sen. Wieckowski represents the 10th District, which includes southern Alameda County and parts of Santa Clara County.