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The $1.9 trillion relief package signed into law by President Joe Biden provides several provisions that benefit both college student loan borrowers and non-borrowers and may pave the way for broad-based student loan forgiveness in the future.
Tax-free student loan forgiveness
Currently, federal student loan borrowers can enroll in programs that allow forgiveness after 20 or 25 years of on-time payments, but they have to pay taxes on the amount that is ultimately forgiven. The American Rescue Plan changes that. Federal student loan debt forgiven between Jan. 1, 2021 and Dec. 31, 2025 will be exempt from federal taxes.
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Bernice Napach
Bernice Napach is a senior writer at ThinkAdvisor covering financial markets and asset managers, robo-advisors, college planning and retirement issues. She has worked at Yahoo Finance, Bloomberg TV, CNBC, Reuters, Investor's Business Daily and The Bond Buyer and has written articles for The New York Times, TheStreet.com, The Star-Ledger, The Record, Variety and Worth magazine. Bernice has a Bachelor of Science in Social Welfare from SUNY at Stony Brook.
