As President Joe Biden announces his student loan forgiveness plan, borrowers in several states may…
The Western Journal
President Joe Biden’s student loan forgiveness plan could lift crushing debt burdens from millions of borrowers, but the tax man may demand a cut of the relief in some states.
That’s because in some states tax forgiven debt is seen as income, which means borrowers who are still paying down student loans could owe taxes on the $10,000 — or even $20,000 — that was taken off their bill. In Mississippi, Minnesota, Wisconsin, Arkansas and North Carolina, forgiven student loans will be subject to state income taxes unless they change their laws to conform with a federal tax exemption for student loans, according to a tally by the Tax Foundation, a Washington, D.C.-based think tank.
That dismays Cathy Newman, a Louisiana State University graduate who just took a job teaching freshman biology at the University of Southern Mississippi in Hattiesburg. She figures she could end up owing a few hundred dollars of money that she could have kept had she stayed in Louisiana.
