No actual cash is going to be forwarded to these debtors, correct?
Trying to picture what WILL take place, and it seems as if the outstanding balance of a birrower’s student loan account with the U.S. federal government will simply be reduced by $10,000 by means of an external accounting entry.
PPresumably this will be considered $10,000 of taxable income for the 2022 tax year, the tax for which will be dye next April?
But the main point is, no actual money held by FedGov will be disbursed.
Also, the individuals who will benefit have already been paying zero dollars for a couple of years now toward paying back these loans or reducing their outstanding balances. It’s not as if they will instantaneously see a reduction in the amount they are paying in terms of monthly bills.
PRIOR legislation makes this NOT TAXABLE-—
A DOUBLE WHAMMY against taxpayers.
Under ยง 9675 of the American Rescue Plan Act (ARPA), the forgiveness of student loan debt between 2021 and 2025 does not count toward federal taxable income