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Thread: ATTN: Student Loan-drones

  1. #31
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    Williamsmith, I can't get the article to open but it looks really interesting. Question since you can read the article, is it only the income-based programs where they owe tax on the forgiven amount, or does this also include the programs that people have discussed here, the ones where they work in an identified job for 10 years and then have the loan forgiven?

  2. #32
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    Quote Originally Posted by Tybee View Post
    Williamsmith, I can't get the article to open but it looks really interesting. Question since you can read the article, is it only the income-based programs where they owe tax on the forgiven amount, or does this also include the programs that people have discussed here, the ones where they work in an identified job for 10 years and then have the loan forgiven?
    Okay, this article:
    https://www.cnbc.com/2016/09/09/stud...-tax-bomb.html

    says the public service ones don't have the tax repayment, but if your loan converts, or if you become disabled, for example, and can't work, you get the tax hit.

  3. #33
    Senior Member Ultralight's Avatar
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    Hey Yppej, you gonna weigh in on this?

  4. #34
    Williamsmith
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    Well, going to the source it says this.....

    https://www.irs.gov/taxtopics/tc431

    exception to cancellation of loan debt income includes the student loan foregiveness program who work for specific employers. Provided Congress doesn’t change the law some time down the road. Still, I’d say restricting your options for employment for an extentended period of time....is a tax.

  5. #35
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    Quote Originally Posted by Williamsmith View Post
    Well, going to the source it says this.....

    https://www.irs.gov/taxtopics/tc431

    exception to cancellation of loan debt income includes the student loan foregiveness program who work for specific employers. Provided Congress doesn’t change the law some time down the road. Still, I’d say restricting your options for employment for an extentended period of time....is a tax.
    I think we've talked a lot about this on the forums because of the economic benefits of the forgiveness program over time, along with the fact that many of these jobs carry government pensions, which are so rare these days. You can say it is a tax, just like Catherine's son having to pay tax on the value of the tuition repayment at the time he received it while in law school is a tax, but I do think that the value being received in these programs far outweighs the tax issue. On the other hand, getting hit with a tax bill at the end when you think your loan has been forgiven--that seems like quite another tax issue to me, just like the folks who got hit with tax bills when they lost their houses to short sales or the bank took the house in lieu of repayment of the mortgage.

    Similarly, I think hitting a disabled person with a tax bill after the student loan is forgiven is unconscionable.

    A choice to stay in a job because of the loan forgiveness payoff at the end is a freely arrived-at choice. Not true for these other scenarios in the "tax bomb."

    I had heard on NPR something about the loan forgiveness program being done away with under Trump, but that seemed to change very quickly, and the program seems fine for now, although it was an interesting program and worth looking up on NPR.

  6. #36
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    This is from last August, not the story I was looking for, but a place to start:
    https://www.npr.org/sections/ed/2017...an-forgiveness

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