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The devil is in the details (the last bullet point on your first link): > You may have to pay taxes on any loan amount that is forgiven after 20 years. Roughl
by esurc 14y ago
The devil is in the details (the last bullet point on your first link):
> You may have to pay taxes on any loan amount that is forgiven after 20 years.
Roughly: the more student loan payments are reduced now, the more the borrower will pay in federal income taxes later.
The unpaid portion of the loans will be accumulating at least some interest until forgiven. Forgiveness of that remaining balance would (under today's law) trigger a significant tax event for the borrower.
- jbooth 14y agoLike with every kind of income, getting the income and paying 30-40% tax on it is vastly better than not getting the income. But yeah, that's a big chunk of money to have to come up with all at once in a given year.