Student Loan Interest Deduction Letter

February 20, 2001

Representative Phil English
1410 Longworth House Office Building
Washington, D.C. 20515-3803

Dear Representative English:

On behalf of the 300,000 physicians, resident physicians, and medical students of the American Medical Association (AMA), I am writing to commend you and Representative Hulshof for your efforts to advance tax relief for all students through a deduction of student loan interest. Specifically, the AMA applauds the objectives of H.R. 436, including repealing the dollar limitation on the deduction for interest on education loans, increasing the income threshold for the phase out of the deduction, and repealing the 60-month limitation on the amount of such interest that is allowable as a deduction.

The AMA is pleased that members in both the Senate and the House are considering tax relief for all students through such bills as H.R. 436 and S. 152. The AMA urges a bipartisan effort for the passage of your bill.

This issue is a high priority for the AMA and its student, resident and young physician members. The typical medical student departs from medical school with an average of approximately $95,000 in student loan debt. This is a tremendous hardship, especially during the years a physician is undergoing his or her residency program. Students who need to borrow to finance their education need broader tax relief through an expanded deduction.

As you know, current law limits this tax benefit and complicates its administration. By repealing the 60-month limitation, which allows the interest to remain deductible as long as the loan is outstanding, and, by repealing the dollar limitation, you would be greatly assisting all student borrowers. In the same way, increasing the income threshold to $115,000 for single borrowers and $165,000 for married couples would aid younger workers paying off high student loan debts.

Again, the AMA offers our sincerest gratitude to you for offering this key legislation at such an early stage in the legislative session. If the AMA can assist you in your efforts, please do not hesitate to call upon us.

Respectfully,

E. Ratcliffe Anderson, Jr., MD