"Making higher education affordable for all who aspire to it and have the ability to benefit from it is vitally important for our nation,” said Dr. Because of this provision, an average student borrower who earns $50,000 in income would save approximately $2,200 in taxes for every $10,000 of forgiven student loans. As a result, individuals who received most forms of student debt relief could have faced a large, surprise tax bill or even be bumped into a higher tax bracket – undermining the goal of student debt relief. Previously, most forms of student loan debt forgiven by the federal government or other entities were considered taxable income under the Internal Revenue Code. Pascrell in the House of Representatives, was included in the American Rescue Plan and signed into law last month. Menendez in the Senate and championed by Rep. The Student Loan Tax Relief Act, which was introduced by Sen. When you are barely keeping your head above water it is a hell of lot harder to make a dent in your student loan principle.” “For millions of Americans and especially people of color, crippling student loan debt has turned the dream of a college education into a financial nightmare that haunts them for decades. For far too long, incomes have failed to keep pace with the rising cost not only of education but also health care, housing, child care, and other basic living expenses. And with the American Rescue Plan now the law of the land, we no longer have to worry about slamming borrowers with surprise taxes on their forgiven debt,” said Sen. “Student loan forgiveness has the power to unleash a wave of consumer-driven growth in this country-and President Biden does not need Congress to do it. Absolutely no one who wants to pursue an education and better themselves should be saddled with debts for the rest of their lives.” Thanks to the Pascrell-Menendez-Gomez-Warren provision included in the American Rescue Plan, student debt loan forgiveness can be tax-free and give enormous flexibility to millions of Americans. “Students face enormous anxiety about the post-pandemic world and carry mountains of loan debt. They have been robbed of a year of their lives,” said Rep. “This has not been an easy year for anybody, but the burden on our students is very heavy. Nationwide, more than 43 million Americans hold a combined $1.6 trillion in federal student loan debt, with many struggling to make payments even before the current economic crisis caused them to fall further behind. In New Jersey, an estimated 1.3 million borrowers hold $48.8 billion in student loan debt, with an average balance of more than $33,000. ![]() Pascrell’s full remarks at today’s press conference here.
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