did the student loan forgiveness pass

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Saturday, March 6, 2021

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  • How many borrowers will be immediately forgiven from student loans?

  • The plan will bring 3.6 million borrowers closer to debt forgiveness and 40,000 borrowers will receive immediate forgiveness. The borrowers who qualify for the Public Service Loan Forgiveness program are immediately forgiven of student loan debt. This category includes government and nonprofit workers, who have 10 years of qualifying loan payments.

  • What is the tax treatment of student loan debt forgiveness?

  • Congress also took action concerning the tax treatment of student loan debt forgiveness. The American Rescue Plan Act of 2021 included tax-free status for all student loan forgiveness and debt cancellation through December 31, 2025.

  • Is student loan forgiveness tax free in 2021?

  • The $1.9 trillion Covid-19 relief legislation passed by the U.S. Senate makes all student loan forgiveness tax-free. The American Rescue Plan Act of 2021 passed in the Senate on March 6, 2021 by a vote of 50 to 49 along party lines. It now returns to the U.S. House of Representatives, where it is expected to pass.

  • Do you lose student loan forgiveness when you refinance?

  • On the other hand, borrowers with private student loans do not risk losing forgiveness if they refinance their private student loans into a new private loan. Borrowers who still have jobs and are able to continue making payments on their student loans should bank the money or pay down other debt, instead of making extra payments on their loans.

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