At last check, the amount of student loan debt nationwide is around $1.3 trillion. This could mean a large tax burden down the road for some. Two options for student loan debt forgiveness are in place now, income-based repayment plans and public service loan forgiveness.
Loan Forgiveness Still Far Ahead
What some do not realize is that these loan forgiveness programs are replaced by tax debt. However, those in student loan debt have some time to wait before forgiveness may be an option. The soonest that student loan forgiveness will begin for income-based repayment plans and tax bills from the IRS is July 2019.
Those that have experienced a death in the family where student loan debt was apparent have already received tax bills. Those which are permanently disabled with discharged loans also have started receiving tax bills. Arguments among lawmakers have been ongoing to attempt to stop taxing families which have lost loved ones or have had loved ones become disabled with student loan debt.
You have to be deemed eligible for loan forgiveness. This is based upon your individual ability to complete on-time payments. Private student loans are not included in the forgiveness plan. No one will be deemed eligible until at least October 2017.
If you have made 120 on-time payments, you are likely to qualify for student loan forgiveness. You should also be working full-time. The catch is that your employer has to be an approved employer in order for student loan forgiveness to be an option for you.
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