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.
In one example, Protect Borrowers estimated that a married couple with two children earning $60,000 a year would face about $7,200 in additional federal taxes and lost credits if they had about $50,000 in student debt forgiven. Across the scenarios it modeled, the additional cost ranged from about $6,000 to $12,000.
The analysis was based on 2026 federal tax rules and used the average student-loan balance canceled under an…