What Biden's new student loan forgiveness plan means for your taxes

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What Biden's new student loan forgiveness plan means for your taxes
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President Joe Biden on Monday unveiled a new student loan forgiveness plan. Here's how the proposed relief could affect your taxes.

President Joe Biden on Monday unveiled a new student loan forgiveness plan including up to $20,000 in interest relief and debt cancellation for certain groups.

But borrowers could still owe federal taxes on future forgiveness, experts say. Some states may also tax debt forgiveness received this year or in future years.Here's how to make key college decisions amid FAFSA delaysIf Biden's new plan is finalized as proposed and borrowers receive cancellation before 2026, the forgiven balance won't incur federal taxes.

Biden's proposal to cancel student loan interest could reduce balances. But if tax-free forgiveness isn't extended, "some borrowers are potentially facing a pretty large tax bill down the line," said Miller, who specializes in student loans.

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