GRADUATE Act, the official text

119 HR 7536 IH: Generating Relief for Academic Debt Using Assisted Tax Efficiency Act
U.S. House of Representatives
2026-02-12
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EN
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I 119th CONGRESS 2d Session H. R. 7536 IN THE HOUSE OF REPRESENTATIVES February 12, 2026 Mr. Goldman of New York (for himself, Ms. Jacobs , Mr. Garcia of California , Ms. Norton , Mr. Figures , and Ms. Pingree ) introduced the following bill; which was referred to the Committee on Ways and Means
A BILL To amend the Internal Revenue Code of 1986 to expand the deduction for student loan interest to include payments toward principal, and to increase the value of the deduction.
1. Short title
This Act may be cited as the Generating Relief for Academic Debt Using Assisted Tax Efficiency Act or the GRADUATE Act .
2. Education loan deduction
(a) In general
Section 221 of the Internal Revenue Code of 1986 is amended—
(1) in the heading, by striking Interest on education loans and inserting Education loans ,
(2) by amending subsection (a) to read as follows:
(a) Allowance of deduction
In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to the amounts paid by the taxpayer during the taxable year on any qualified education loan.
,
(3) by amending subsection (b) to read as follows:
(b) Maximum deduction
(1) In general
Except as provided in paragraph (2), the deduction allowed by subsection (a) for the taxable year shall not exceed an amount equal to the sum of—
(A) $10,000, plus
(B) $500 multiplied by the number of dependents of the taxpayer for such taxable year.
(2) Limitation based on modified adjusted gross income
(A) In general
The amount which would (but for this paragraph) be allowable as a deduction under this section shall be reduced (but not below zero) by the amount determined under subparagraph (B).
(B) Amount of reduction
The amount determined under this subparagraph is the amount which bears the same ratio to the amount which would be so taken into account as—
(i) the excess of—
(I) the taxpayer’s modified adjusted gross income for such taxable year, over
(II) $125,000 ($250,000 in the case of a joint return), bears to
(ii) $25,000 ($50,000 in the case of a joint return).
(C) Modified adjusted gross income
The term modified adjusted gross income means adjusted gross income determined—
(i) without regard to this section and sections 85(c), 911, 931, and 933, and
(ii) after application of sections 86, 135, 137, 219, and 469.
, and
(4) in subsection (f)(1)—
(A) by striking after 2002 and inserting after 2026 ,
(B) by striking $50,000 and $100,000 and inserting $125,000 and $250,000 , and
(C) in subparagraph (B), by striking calendar year 2001 and inserting calendar year 2025 .
(b) Conforming amendment
Section 62(a)(17) of such Code is amended to read as follows:
(17) Education loan payments
The deduction allowed by section 221.
.
(c) Effective date
The amendment made by this section shall apply to taxable years beginning after December 31, 2025.