President Donald Trump’s “big beautiful bill,” which Congress passed earlier this month, has tax implications for people who receive student loan forgiveness.
Here’s what borrowers expecting the loan relief should know.
The American Rescue Plan Act of 2021 made student loan forgiveness tax-free at the federal level through the end of 2025. Trump’s “big beautiful bill,” while making other specific kinds of student loan relief tax-free, did not extend or make permanent that broader provision.
In theory, lawmakers could move to protect the relief from taxes before the end of the year, but borrowers shouldn’t count on it, experts say.
“Republicans do not like [student loan] forgiveness, and are unlikely to make it tax-free,” said higher education expert Mark Kantrowitz.
