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Tax Consequences Loom for Forgiven Student Loans in 2026

2/24/2026

Summary

Story summary

In 2026, forgiven student loan amounts could be taxed as federal income after the expiration of a law shielding relief.
Borrowers on income-driven repayment plans could have forgiven amounts treated as taxable income, with liabilities potentially above $12,000 in the 22% bracket.
This could push borrowers into higher tax brackets and affect other tax benefits.
Financial advisors urge planning ahead and setting aside funds to cover upcoming tax obligations.

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Story summary

In 2026, forgiven student loan amounts could be taxed as federal income after the expiration of a law shielding relief.
Borrowers on income-driven repayment plans could have forgiven amounts treated as taxable income, with liabilities potentially above $12,000 in the 22% bracket.
This could push borrowers into higher tax brackets and affect other tax benefits.
Financial advisors urge planning ahead and setting aside funds to cover upcoming tax obligations.