Tax-free student loan forgiveness ended in 2025. Will you owe more?

For those struggling with student loan debt, the idea of loan forgiveness can sound like a dream come true. Thanks to the American Rescue Plan Act of 2021, students could qualify for loan forgiveness without worrying about surprise tax bills — the act made all federal student loan forgiveness programs tax-free. However, that provision is set to expire at the end of this year. Loans forgiven on or after Jan. 1, 2026, may be taxable as income. Which borrowers are affected by the expiration of tax-free lo ...