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Like everyone else, I was ecstatic with the passage of the 1997 tax act. Finally, all of us who went to school to better ourselves (and the economy), taking out student loans to do so, were going to get a tax break. For once, tax breaks seemed to go to folks that needed it.

However, now that my wife and I both have gone on and gotten our Master's, we have another problem: our combined income grew so quickly that we no longer get the credits for interest paid on student loans (these phase out completely at $75,000 for a couple filing jointly).

To minimize our exposure, we bought a house. Still, it burns me up that we are paying on all those loans but not getting any break on the interest.

A friend of mine suggested that since real estate has appreciated so much, we should have enough equity in the house to pay off most of our student loans with a home equity loan, the benefit being that the interest on a home equity loan is deductable. Anyone have any thoughts on this advice?
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