Publishers / news editor:
President Joe Biden’s student loan amnesty plan could ease the debt burden for millions of borrowers, but taxpayers could call for relief cuts in some states.
This is because some state tax-free loans as income, which means that borrowers who are still repaying student loans may have to pay taxes of up to $ 10,000 or $ 20,000 on their bills. East.
In Mississippi, Minnesota, Wisconsin, Arkansas, and North Carolina, canceled student loans will be subject to state income tax unless they change their laws to comply with federal tax exemptions for student loans, according to a tally in the state. Tax Foundation, Washington, DC-based think tank. according to.
Spokesmen for tax agencies in several states, including Virginia, Idaho, New York, West Virginia, Pennsylvania, and Kentucky, told The Associated Press that their states would not tax the loans. students canceled under Biden’s program. But tax authorities in other states have said they need to do more research to find out.
Biden’s plan would eliminate or reduce student loan debt for more than 40 million Americans. So there are students on loan in every community and the public interest is almost unlimited. Find the latest AP coverage here. https://apnews.com/article/biden-education-minnesota-mississippi-ffe9ed18bf0a434970ab09b1d89800e2
Some tips for locating the story:
Resource
– To find out if your state will apply student loan tax amnesty, start with the Tax Foundation, which maintains an account: https://taxfoundation.org/student-loan-debt-cancellation-tax-treatment
– As the Tax Foundation shows, it is not easy to tell what state tax laws are by laws alone. They work hard to find out.
—Another official source would be your state’s Department of Revenue, warning that some states are still investigating whether canceled student loan debt would be taxable under their laws. It is not necessarily a simple question.
—For data on borrowers, the US Department of Education publishes data on federal student loans with some state breakouts. Visit: https://studentaid.gov/data-center/student/portfolio
– On this website, you can click “Portfolio by Location” to see the number of borrowers and total loans in each state. There are even more specific spreadsheets to break this down based on loan status and size, status and age, and more.
– Note: Pandemic legislation passed last year means student loan amnesties will not be subject to federal taxes. The law exempts most canceled student loans from federal taxes until 2025.
Reporting questions / suggestions
– What types of students and borrowers rely on student loans in your state? What is your background?
– What are the income and demographic patterns?
– Students who receive a Pell Scholarship are eligible for a loan amnesty of up to $ 20,000. They typically come from low-income families and will likely have a hard time paying taxes. How do they feel about it?
– You can also get local data from your state’s Department of Education or Higher Education.
– Your governor’s office and key lawmakers, including the chair of the tax and higher education committee, may have views on whether your state can change its laws to comply with federal exemptions.
– To find borrowers in your state who may be affected by the fees on their canceled loans, you can find borrowers who have publicly complained about their plight on social media, such as Twitter.
– School hours are back in many colleges and universities. Newcomers may not be eligible for a loan waiver. But you may find upper-class students and graduates who may be interested in the launch of your local college’s financial aid office. And don’t forget that traditional two-year and four-year public colleges aren’t the only schools where students borrow from the federal student loan program to cover their fees.
additional background
– You can find previous AP student loan stories here: https://apnews.com/hub/student-loans
– and you can find previous AP stories on Pell Grants here: https://apnews.com/hub/pell-grant
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Locate This is an occasional feature created by The Associated Press for its clients. Questions can be directed to Katie Oyan at [email protected]