Republican lawmakers revealed their new tax plan on Thursday—a measure that would eliminate several tax breaks for college graduates.
One of the standout concerns is the move to repeal the tax deduction on student loan interest. Those paying back loans can claim up to $2,500 of their federal and private student loan interest.
Twelve million took advantage of the tax break in 2015—a small portion compared to the 44 million who were paying back loans, according to IRS records. Recent graduates who are unmarried and make less than $65,000 benefit the most, although it may only save them a couple hundred dollars. Only about 3 in 10 used the tax break in 2015.
Renowned tax law expert Edward J. McCaffery said the proposal to eliminate this tax break isn't the only thing millennials should be wary of. He compared the GOP representatives revising the tax code to people cleaning out their closets.
Critics say low- and middle-class households are going to be hit the hardest if the legislation is passed. A new limit on mortgage interest deductions, state and local deductions, and a repeal of the medical expense deduction are just some of their biggest concerns.
For millennials who pay rent or live with their parents, are still using their parents' health insurance or are just unfamiliar with how taxes work, McCaffery breaks it down: Young people might not feel the immediate impact of the bill now, but could feel the financial strain in the long run.
Many Americans are concerned that the Republican plan would add $1.5 trillion to the federal budget deficit.