In recent months, national journalists and academic leaders have discussed a waning confidence among some Americans in the value of a college education (see examples in The New York Times Magazine, The Wall Street Journal, and The Atlantic). Rising sticker prices at both public and private institutions and student loan debt increasingly are raising questions about whether the benefits of a college degree outweigh the costs.

Labor market projections examined by the Wisconsin Policy Forum provide a helpful perspective. The Forum, a member of the Wisconsin Coalition on Student Debt, examined data from the state Department of Workforce Development’s long-term occupational employment projections for 2020 to 2030 to see what education and skills are needed for the jobs of the future. 

Looking at jobs that currently pay median wages of $50,000 or more a year, 58.1% of those jobs opening each year through 2030 will be in occupations that typically require a bachelor’s or advanced degree for entry. Another 5.9% require an associate degree or postsecondary non-degree award, such as a certificate or technical diploma from a community college.

Looking at occupations that currently pay a median wage of $75,000 or more annually, 91% of the projected openings in those jobs will require a bachelor’s or advanced degree. For more on this topic, read the Forum’s brief.

It’s tax season, and if you have student loans, you probably have questions. Here are some resources with answers to common questions. 

First, let’s talk about the student loan interest deduction, which is reported on Form 1098-E. Servicers of both federal and private loans are required to send these forms to all borrowers who paid $600 or more in interest on their loans in 2023. A servicer may send this to borrowers who paid less than $600, and if you had more than one servicer in 2023, you could receive multiple forms. The interest total includes capitalized interest, which may occur for various reasons, including if you consolidated or refinanced your student loans in the last year. A borrower can take the Student Loan Interest Deduction even if they did not receive a Form 1098-E from a servicer, they just need to calculate the interest they paid on their own. The maximum deduction is $2,500 per year, and it phases out as income increases. This is an “above the line” deduction so it has the added benefit of potentially lowering a borrower’s Adjusted Gross Income (AGI), great for borrowers on Income-Driven Repayment (IDR) plans who have monthly payments based on their AGI. This deduction is not available to borrowers who are married but file their taxes separately. 

Next let’s cover tax filing for married couples. If a borrower is repaying their student loans under an IDR plan and they are married, the “income” used to calculate their monthly payment can change depending on how they file. “Married Filing Jointly” typically accesses more tax advantages than “Married Filing Separately,” but filing separately can shield one spouse’s income from being part of the monthly payment calculation under an IDR plan. This is a highly individual consideration, and while there are numerous calculators out there to help borrowers decide what works best for them, a borrower may need to consult a tax professional or input but not submit their tax information under both filing statuses to compare figures and benefits. 

Lastly, let’s discuss taxable student loan discharge or forgiveness. The Biden administration has been discharging or forgiving a lot of student loans under several different programs and provisions. Which program your loan is discharged or forgiven under may matter for how the federal and state tax codes treat the amount forgiven. Generally, forgiven debt counts as income to the borrower, but at the federal level, amounts forgiven under Public Service Loan Forgiveness (PSLF) are always exempt from income, and therefore tax free. Loans discharged under other programs are at least temporarily tax-free at the federal level until December 31, 2025. Most states mirror this federal treatment, but Wisconsin is one of the states that does not. For Wisconsin residents, the Department of Revenue published a helpful FAQ. Borrowers with tax questions should consult with a tax professional.