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Student loan forgiveness is a ticking tax bomb again, study warns
Researchers say forgiveness could leave millions of borrowers facing federal tax bills as the cost is shifted to taxpayers.
- Student loan forgiveness can trigger unexpected tax bills, as the Internal Revenue Service treats forgiven debt as taxable income in specific scenarios.
- Working-Class families often bear the steepest consequences from these tax liabilities, which are generally due with annual IRS filings.
- Policy analyst Jennifer Zhang at Bright Horizons warns borrowers to estimate tax liability before accepting forgiveness, while Senior Director Stacey MacPhetres notes the relief remains generally advantageous despite costs.
- The IRS provides payment plans for borrowers unable to pay full bills; however, certified public accountant Richard cautions that interest and penalties may accrue on unpaid balances.
- Consulting tax professionals helps borrowers mitigate risks of surprise tax burdens after relief by clarifying their specific tax status and family size considerations.
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41 Articles
41 Articles
Winona Daily News+40 Reposted by 40 other sources
Student loan forgiveness is a ticking tax bomb again, study warns
Borrowers who earn IDR cancellation could see tax increases of roughly an additional $6,000 to nearly $12,000 depending on their income, tax status and family size, Protect Borrowers estimated.
Coverage Details
Total News Sources41
Leaning Left5Leaning Right1Center35Last UpdatedBias Distribution85% Center
Bias Distribution
- 85% of the sources are Center
85% Center
12%
C 85%
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