Recipients Of Biden’s Student Loan Cancellation Plan Also Get A Tax Break

Recipients Of Biden’s Student Loan Cancellation Plan Also Get A Tax Break


Those who benefit from President Joe Biden’s policy to cancel $10,000 in student debt per borrower will not have to pay taxes on their forgiven loans thanks to a provision passed under the American Rescue Plan last year.

The loan cancellation policy applies to individuals with annual wages under $125,000. Although current law generally considers forgiven debt to be taxable income, student loans were exempted from such income-driven repayment plans through 2025 under “the rationale that tax burden arising from treating forgiven student debt as income partially undermines debt relief,” according to an analysis from the Tax Foundation.

“It makes sense to have consistent rules in the tax code,” Tax Foundation federal policy analyst Alex Muresianu told The Daily Wire. “It doesn’t make sense to make forgiven

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