By Danielle Douglas-Gabriel, The Washington Post, March 10, 2021
President Biden is slated to sign into law this week a $1.9 trillion stimulus package that clears one hurdle for broad student debt cancellation and tightens federal regulation of for-profit colleges.
Congressional leaders seized an opportunity to accomplish some long-standing objectives through the latest pandemic relief bill, which passed the House on Wednesday. Chief among them is eliminating the tax burden many student loan borrowers would face if any portion of their debt was discharged.
The tax relief is good only through January 2026, but lawmakers say it is a key step in canceling some of the $1.5 trillion in federal student loans held by 45 million Americans. Among the many concerns surrounding widespread forgiveness is whether debt relief would be subject to taxation, which could undermine the benefit to borrowers and ultimately the economy.
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