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Biden wants to make student loan forgiveness tax-free permanently

The American Rescue Plan Act of 2021 made student loan forgiveness tax-free at the federal level through the end of 2025.

President Joe Biden wants to extend that policy indefinitely.

While the president continues to try to deliver on a sweeping federal student loan forgiveness plan, tucked into his 2025 fiscal-year budget is a provision that would shield forgiven education debt from federal taxes permanently.

Consumer advocates are in support of such a policy.

“Unfortunately, borrowers often experience significant stress as they worry about the tax bill that could come once their loan balance is forgiven,” said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.