|
The administration's plan to forgive up to $20,000 in student loan debt is planned to impact millions of Americans. The plan could add tax bills up to $1,100 for borrowers in some states. That may catch some borrowers by surprise, given that the administration noted its loan forgiveness won't be considered federal taxable income under a provision of the American Rescue Plan Act. That law doesn't exempt loan forgiveness at the state level, although some states will likely follow the federal law in their treatment of the loan relief. In the coming weeks and months, we are likely to see states issue guidance on the treatment of discharged student loan debt. Hawaii, Idaho, Kentucky, New York, Pennsylvania and Virginia have already decided to exempt student loan forgiveness money from state taxes. Mississippi's Department of Revenue said that it will tax the student loan forgiveness dollars. Student loan debt in the United States has grown to $1.75 trillion.
|
RAISING THE BAR 
