May 18, 2001

Senate Tax Bill Includes SLID Provisions; NHSC Scholarship Tax Exemption

The $1.35 trillion tax cut bill passed by the Senate Finance Committee on May 15 includes provisions relating to the student loan interest deduction (SLID) and eliminating the tax on National Health Service Corps (NHSC) scholarships. Specifically, the bill includes provisions to eliminate the 60-month limit and expand existing income thresholds to include borrowers with incomes up to $65,000 ($130,000 in the case of joint filers), with the amount deductible phasing out beginning at $50,000 ($100,000 for joint filers). The Senate proposal also includes provisions to exclude payments for tuition, fees and education-related expenses under the NHSC scholarship program and the F. Edward Hebert Armed Forces Health Professions Scholarship and Financial Assistance Program from gross income for tax purposes. The final version of the tax bill is expected to be negotiated in the conference committee.

Information: Jonathan Fishburn, AAMC Office of Governmental Relations, 202-828-0525.