President Joe Biden is proposing to make a temporary tax benefit permanent for most federal student loan borrowers who have or would be eligible for a discharge of their debts.
The America Rescue Plan Act, a $1.9 trillion pandemic-era stimulus package that President Biden signed in 2021, exempts most types of forgiven student loans from federal income taxes. But it applies only to loans discharged between Jan. 1, 2021, and Dec. 31, 2025.
As part of the White House’s newly released budget proposal for Fiscal Year 2025, President Biden wants to keep student loan cancellations shielded from federal taxation for an unlimited time.
If the proposal is approved by Congress, student loan debts discharged under Income-Driven Repayment (IDR) and Total and Permanent Disability (TPD) plans would remain non-taxable….
