The good news: student-loan forgiveness is back on. The bad news: borrowers who get it could face thousands of dollars in new taxes next year.
On Monday, Sen. Elizabeth Warren led a group of her Democratic colleagues in sending a letter to Treasury Secretary Scott Bessent, exclusively viewed by Business Insider, calling on him to use his authority to prevent a “tax bomb” from hitting student-loan borrowers next year. The lawmakers are referring to a 2021 provision in the American Rescue plan that made student-loan forgiveness tax-free, and the provision is set to expire in January 2026.
It means that borrowers who complete their payments on income-driven repayment plans in 2026 could face thousands of dollars…