"If you have student loan debt, you’re probably aware of how loan forgiveness affects your taxes. Right now, forgiven loans are considered as income on tax day. But a new bill in the Michigan House of Representatives is looking to change that," WILX reports.
..."Forgiven loans are considered income for tax purposes. So, whatever is forgiven, gets added to your tax responsibilities. This bill would prevent that.
Megan Coval is VP of Policy and Federal Relations for the National Association of Student Financial Aid Administrators.
'We at the national level have advocated for loan forgiveness to be tax free,' Coval said. 'It is definitely a great benefit to the student to have their loans forgiven, but then if they turn around and are kind of hit with a big tax bill because of it … that’s really kind of hurting them in a way.'
People in some forgiveness programs have to wait years to take advantage of them based on making consistent payments over time."
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Publication Date: 6/2/2021