Harrisburg, PA – Gov. Tom Wolf reminded Pennsylvanians this week that student loan borrowers who will receive up to $20,000 in relief under President Joe Biden’s Student Debt Relief Plan will not be taxed on that relief.
This follows the governor’s action late last year on the student loan debt relief Pennsylvanians received from the federal Public Service Loan Forgiveness (PSLF) Program and the Pennsylvania Student Loan Relief for Nurses Program.
“Cumulative federal student loan debt is holding back Pennsylvanians who want to pay their bills, afford housing and have a little financial breathing room all while obtaining meaningful employment and a successful career,” Wolf said. “I applaud President Biden for supporting hard-working student loan borrowers who are shouldering astronomical student debt by providing much-needed relief. Given this positive action at the federal level, my administration does not intend to burden these Pennsylvanians with a tax bill following this beneficial action. Therefore, that relief will not be considered taxable income in Pennsylvania.”
Student loan forgiveness is not considered taxable income at the federal level.
The governor’s action removes an immense burden from student borrowers who receive loan forgiveness in Pennsylvania by ensuring that they aren’t surprised by a tax bill the year they receive their loan forgiveness.