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Student Loan Forgiveness Could Triple Tax Bill for Many Borrowers: Report
Protect Borrowers said 2 million to 3 million borrowers could owe thousands more in federal taxes when forgiven debt is counted as income.
- On Wednesday, advocacy group Protect Borrowers released a report warning that up to 3 million federal student loan borrowers could face tax bills of nearly $12,000 on debt forgiven under income-driven repayment plans.
- The tax exposure stems from the expiration of relief Congress had previously put in place under the American Rescue Plan Act, which shielded federal student loan discharges from federal income tax until December 31, 2025.
- Jennifer Zhang, policy analyst at Protect Borrowers, warned the situation forces working-class families to "trade their student loan debt for debt to the IRS," stating "Congress can and must take action to defuse the tax bomb."
- Democratic lawmakers previously urged the Treasury Department to restore the tax-free provision, yet the government continues pursuing collection through wage garnishments and liens as the debt burden shifts to the IRS.
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12 Articles
12 Articles
Student loan forgiveness could hike tax bill for borrowers, study finds
A new study says tax bills could triple for people who receive student loan forgiveness through income-driven repayment (IDR) plans. Previously, forgiven student loans were exempt from federal income tax, but that provision expired at the end of 2025. An average married couple with two dependents earning around $60,000 could see their tax bill go up by…
·Washington, United States
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Louisiana borrowers to face biggest ‘tax bomb’ from student loan forgiveness
Some Louisianians could see their tax bills triple — the biggest increase in the country — following the expiration of a law that kept forgiven student loan debt from being treated as income, according to a new report. Student loan debtholders in Louisiana and the rest of the South are expected to be the hardest […]
3 Million Student Loan Borrowers Could Face $12,000 Tax Penalty, Warns Group
·Jersey City, United States
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Total News Sources12
Leaning Left3Leaning Right0Center5Last UpdatedBias Distribution62% Center
Bias Distribution
- 62% of the sources are Center
62% Center
L 38%
C 62%
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