Joe Biden last month announced his intention to forgive $10,000 for student loan borrowers, while increasing it to $20,000 for those with Pell grants. Depending on what state a student lives in, these loan repayments could result in a hefty tax bill.
Fox News reports:
Mississippi borrowers making less than $125,000 per year may have $10,000 of student loan debt forgiven and may owe an additional $500 in taxes.
Pell Grants are typically given to borrowers who need more help financially. These borrowers are eligible for $20,000 in student loan forgiveness and may owe an additional $1,000 in taxes.
“It feels in a lot of ways like a tax on being poor,” Stegall said.
So far, Mississippi, Minnesota, Wisconsin, Massachusetts, Arkansas, Indiana and North Carolina have announced plans to tax the student loan handout funds. But if you file in Virginia, Idaho, New York, West Virginia, Pennsylvania and Kentucky, don’t expect to be taxed.
These are the latest ramifications from Biden’s student loan handout that many Americans feel is unfair, especially to those who did not go to college or who paid off their debt and now are forced to pay for others’ education choices.