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Thoughts on Biden 10K-20K Loan Forgiveness

Thoughts on Biden 10K-20K Loan Forgiveness

September 9, 2022 admin 0 Comments

You might have heard that about 8 million people will get it automatically.

This is mostly folks who have filled out a FAFSA since 2020.

Most borrowers on an IDR plan will need to apply for it, because most borrowers have not certified income since tax year 2019.

Is there a downside to applying if you’re going for forgiveness? In most cases no. Until December 2025, federal loan forgiveness of any kind is not taxable income. In almost all states, it’s also tax-free. If you live in NC, MS, IN (and possibly WI, AR, WV, or MN too), check with your CPA.

We’re monitoring cancellation closely so you don’t have to. Our expectation right now is once we see cancellation start happening in October or November, they won’t be able to stop it.

That said, cancellation of 10k or 20k is unfortunately minor for many folks. The new IDR plan is a much bigger deal.

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