It would last through the beginning of 2026, but could be extended or become permanent, says Taylor. Its a new provision included in the $1.9 trillion stimulus package that President Biden signed into law Thursday  and a big deal for federal student loan borrowers because, currently, any student loan debt canceled by the government is treated as income and can be taxed. This change clears the way for President Biden to use his authority to cancel $50,000 in student debt to provide a massive stimulus to our economy, help narrow the racial wealth gap, and lift this impossible burden off of tens of millions of families, Sen. Elizabeth Warren (D-Mass.) Consider a provision that Senate Democrats snuck into the $1.9 trillion spending bill teeing up as much as $1.6 trillion in student-loan forgiveness. If a new law does cancel $10,000 in student debt per borrower, in addition to forgiven debt not being taxable, the average borrower will save $13,400 in interest, according to an estimate by Taylor.
An estimated 13,400 part of the spending bill was approved by the author of the legislation.
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An estimated 13,400 part of the spending bill was approved by the author of the legislation .
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