In the 70's and 80's student loan interest was tax deductible. Then in the 90's it was
no longer deductible. Now school loan interest is deductible, but there are limitations.

In the mid-80's states started a prison boom, as a result of for-profit contracts with
private companies. Some states have 3 times as many prisons now as they did in the
70's but the crime rate seems to be getting worse and worse.

Perhaps it would have been better if that money were put into educating poor communities that get very little money per student due in part to low taxes paid in their communities.

With the prison boom came a marked increase in college cost. It seemed that the focus on
state budgets went into prisons, and out of education. In the mid-1970’s the fees charged for the University of California were $212 per quarter (for in state students), now they are an astounding $2200 per quarter (for in state students), according to the University of California at San Diego’s registrar’s office, that is an increase far in excess of the rate of inflation I would say. For out of state students, they have to pay fees and tuition, which is about four times that of the in-state fee only student. Currently, that figure is about $8,168 per quarter. There are three quarters in a school year. Unless your parents are financially well-off or you are lucky enough to receive a full scholarship, much of your education will be financed by school loans.

So, to help ease the burden of school loan payments after graduation, college students can deduct part of their school loan interest if they are below a certain income level.

According to the IRS, starting in 1998, taxpayers who have taken out qualified loans to pay certain costs of attending an eligible educational institution for themselves, their spouse, or their dependent are allowed to take a deduction from gross income for the interest they paid on these student loans. Prior to 2002, deduction of student loan interest was limited to the first 60 months of required interest payments and, was subject to income limitations.

Beginning in 2002, interest paid over any period of time on a qualified education loan is
deductible. There are also income limits. For more information, refer to Publication 970,
Tax Benefits for Education; and Tax Topic 456, Student Loan Interest Deduction, publications offered by the Internal Revenue Service.

In most cases you will only get a six-month grace period before school loan payments are due. Save all of your school loan payment records as you make your payments, and make sure you give your accountant all of your school loan payment information, so you can properly deduct interest payments.