Borrowers may look to sinking funds as a way to help plan for potential student loan debt cancellation. These specialized funds are money set aside for specific goals, and the payment of student loan debt could be one of them. In the event that a borrower has their student loans canceled, a sinking fund can be a fallback option for paying any resulting tax bills.
Why It Matters
According to Federal Student Aid, an office of the U.S Department of Education, some federal student loan borrowers could be eligible to have their student loans discharged, forgiven or canceled. If this happens, a borrower may not be required to pay back a canceled loan balance. The Public Service Loan Forgiveness program (PSLF) is one of the most common pathways…
