What to know at tax time

Rhetoric & Writing Studies Major, Adamary Garcia studies inside of the Perry-Castaneda Library at the University of Texas at Austin on February 22, 2024 in Austin, Texas. Brandon Bell | Getty Images
If your federal student loans were forgiven in 2024, you may be wondering if there are any tax implications. Many borrowers have benefited from education debt cancellation under the Biden administration. While in office so far, President Joe Biden has cleared nearly $180 billion in federal student loans for 4.9 million people. More than 1 million people had their debt cleared in 2024. If you’ve had your debt excused last year, here’s what to know at tax time.
No federal taxes on relief through 2025
You could owe taxes to your state
Despite the current federal policy on forgiven student debt, it’s possible a borrower could still face state taxes. Currently, a handful of states tax certain kinds of student loan forgiveness, Kantrowitz said. That could be because their state tax code doesn’t conform to the federal one or hasn’t been updated to reflect the American Rescue Plan.