SENATE HIGHER EDUCATION COMMITTEE

STATEMENT TO

SENATE COMMITTEE SUBSTITUTE FOR

SENATE, No. 580

STATE OF NEW JERSEY

DATED:  MAY 18, 2026

      The Senate Higher Education Committee reports favorably a Senate Committee Substitute for Senate Bill No. 580.

      The committee substitute allows a gross income tax deduction for interest paid on certain student loans.

      Specifically, the bill allows a taxpayer with gross income of $85,000 or less a deduction, not to exceed $2,500 from the taxpayer’s gross income for the taxable year in the amount of interest payments made on a qualified education loan.  The deduction would not apply, however, to interest paid on a student loan under the New Jersey College Loans to Assist State Students Program for which a deduction is already allowed under current law.

      Under the bill, a “qualified education loan” means any indebtedness incurred by the taxpayer solely to pay higher education expenses which are incurred on behalf of the taxpayer, the taxpayer’s spouse, or any dependent of the taxpayer at the time the indebtedness occurred.