Rhode Island House Bill H5759

Rhode Island 2025 Regular Session

• Introduced: 2/26/25
• Refer: 2/26/25

Caption

Allows a deduction from federal adjusted gross income for interest payments on outstanding student loans.

Impact

If enacted, HB 5759 would specifically modify the existing tax laws concerning the personal income tax brackets in Rhode Island. The introduction of this deduction aims to make higher education more accessible by lightening the student debt load, which has become a significant concern among young professionals and working families. This change could lead to a considerable financial impact on state revenues, which lawmakers will need to evaluate to ensure fiscal sustainability while addressing the needs of their constituents.

Summary

House Bill 5759 seeks to amend Rhode Island's personal income tax laws by introducing a tax deduction for interest payments on outstanding student loans. This legislation is presented as a financial relief measure for residents burdened by student debt. By allowing individuals to subtract these payments from their federal adjusted gross income, the bill aims to alleviate some of the financial pressures associated with student loan repayment, potentially making it easier for borrowers to manage their financial obligations and stimulate local economies as residents have more disposable income.

Contention

While proponents of the bill argue it represents a necessary step toward providing financial relief to student borrowers, there may be concerns regarding the implications for state tax revenue. Opponents might argue that providing such deductions could disproportionately benefit higher-income earners who are more likely to have substantial student loan interest payments, thereby raising questions about equity in tax policy. The bill is likely to generate discussion regarding whether it truly addresses the affordability of higher education or merely serves as a temporary fix for a deeper systemic issue.