Student-loan borrowers who get debt relief over the next decade may see their tax bills triple
A report from Protect Borrowers warns that student-loan borrowers may face significantly higher tax bills due to the expiration of a 2021 provision that made debt forgiveness tax-free. Borrowers could see their tax liabilities triple as they reach the end of income-driven repayment plans.
Why it matters
This 'tax bomb' could create a significant financial burden for low-to-middle-income households, potentially negating the benefits of long-term debt relief programs.
A new report shows how student-loan borrowers could face higher tax bills over the next decade. nirat/Getty Images A new analysis from Protect Borrowers showed how student-loan borrowers are on track for higher tax bills. It's a result of the expiration of a 2021 provision that made student-loan forgiveness tax-free. The analysis said that tax bills could triple for some borrowers who get debt relief over the next decade. Hoping for student-loan forgiveness? Get ready for a higher tax bill . On Wednesday, a new report from advocacy group Protect Borrowers showed the impact of the "tax bomb" borrowers now face, following the expiration of a 2021 provision that made student-loan forgiveness tax-free.
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