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Recipients Of Loan Forgiveness Face Unexpected Tax Bills

At a glance

  • Student loan borrowers across the country could soon see up to $20,000 of their student loan debt forgiven in the massive handout announced by President Biden – but it still may come at a cost.
  • State tax may be charged on student loan handout funds. The tax laws vary from state to state.
  • Pell Grants are typically given to borrowers who need more help financially. These borrowers are eligible for $20,000 in student loan forgiveness and may owe an additional $1,000 in taxes.

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