President Biden's plan proposes up to $20,000 in student loan forgiveness for certain groups. Loan forgiveness granted before 2026 will not result in federal tax liability. However, future forgiveness may be subject to federal taxes and potentially state taxes. Borrowers who receive forgiveness under income-driven repayment plans after 2025 may face tax consequences. It's important for borrowers to consider how tax implications could impact them.
The Biden administration has provided student loan forgiveness to almost 4 million borrowers. Borrowers who don't yet qualify can check the Department of Education's website to see if they're eligible for other programs. Two popular options are the Public Service Loan Forgiveness program and income-driven repayment plans. The government is also working on a revised forgiveness plan that could benefit up to 10 million more people.
