Senate approves Wieckowski tax credit bill to provide relief on student debt interest paid

SB 477 would provide up to a $1,000 tax credit

May 23, 2019

SACRAMENTO ­– State Senator Bob Wieckowski’s (D-Fremont) bill to provide up to a $1,000 tax credit to Californians paying off their student loan debt passed the state Senate today with strong bipartisan support.  SB 477 now heads to the Assembly for consideration.

SB 477 would provide a student loan tax credit for the amount of interest a person paid on her student loan throughout the year. The credit is capped at $1,000 for individuals earning up to $100,000 in adjusted gross income and $2,000 for couples earning $200,000.  The bill has a five-year sunset and would cover the years 2019 to 2023.

“Student loan debt is a $1.5 trillion burden on Americans who pursue a higher education,” said Wieckowski, a member of the Senate Budget and Fiscal Review Committee.  “SB 477 provides real relief to the 3.7 million Californians paying off their loans. This large group disproportionately consists of women, students from low-income families, first-generation college students and students of color. It recognizes the struggle they are going through and gives them the ability to recover some of the interest they have paid.  This bill will assist them in reducing some of the cost of higher education and help them keep more money for everyday expenses.”

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.

“Tax credits reflect our values, rewarding good behavior and advancing specific policy goals,” Wieckowski said. “The pursuit of higher education and advanced degrees is encouraged in California. It is also economically important to the state to have an educated workforce. Providing this credit both furthers our values and recognizes the costs of obtaining higher education.”

SB 477 now heads to the state Assembly for consideration.

Sen. Wieckowski represents the 10th District, which includes southern Alameda County and parts of Santa Clara County.