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Tax Relief for Education and Student Loan Repayment

This act introduces changes to tax laws, making it easier for citizens to use retirement savings for educational purposes and student loan repayment without additional taxes. It also increases contribution limits for retirement accounts and introduces new tax deductions related to education expenses, potentially providing financial relief to many families.
Key points
Allows tax-free withdrawals of up to $5,250 annually from retirement plans (401(k), 403(b), 457) for qualified education expenses.
Permits tax-free withdrawals from Individual Retirement Accounts (IRAs) for student loan repayment.
Increases the annual contribution limit for 401(k) and 457 plans from $15,000 to $25,000.
Introduces a new tax deduction for qualified education expenses, including student loan repayment, with no cap.
Employers can repay employee student loans as a tax-free benefit up to $5,250 annually.
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Expired
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Additional Information
Print number: 117_S_3081
Sponsor: Sen. Paul, Rand [R-KY]
Process start date: 2021-10-27
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Summarized by: gemini-2.5-flash-preview-05-20
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Tax Free Education Act of 2021

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 117_S_3081.

Which chamber initiated this legislation?

This legislation was initiated in the Senate.

When did the legislative process begin?

The process officially started on 2021-10-27.

What are the main provisions?

Key points include:

  • Allows tax-free withdrawals of up to $5,250 annually from retirement plans (401(k), 403(b), 457) for qualified education expenses.
  • Permits tax-free withdrawals from Individual Retirement Accounts (IRAs) for student loan repayment.
  • Increases the annual contribution limit for 401(k) and 457 plans from $15,000 to $25,000.
  • Introduces a new tax deduction for qualified education expenses, including student loan repayment, with no cap.
  • Employers can repay employee student loans as a tax-free benefit up to $5,250 annually.
What is the specific legal status?

The current status is Expired.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Sen. Paul, Rand [R-KY].

What is the latest detailed status?

The latest detailed status is: Introduced in Senate

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-29.

CATEGORIES

Taxes Education