Some forgiven federal student loans again count as income, and Louisiana and Mississippi residents could see the steepest tax increases, according to a new report from a nonprofit borrower advocacy group.
Federal student loan borrowers on income-driven repayment (IDR) plans can have their remaining debt canceled after 20, 25 or 30 years.
That forgiven debt had been exempt from federal income tax since 2021, but Congress let the policy expire at the end of last year. Other programs, like Public Service Loan Forgiveness, remain free from federal taxes.
Protect Borrowers‘ analysis looked only at federal taxes and found they could more than triple for a typical family in Louisiana and Mississippi —