Some Student Loan Borrowers Paying Up to $12,000 More on Federal Tax Bills

Newsweek · Suzanne Blake · 2026-11-05 22:34 UTC

Borrowers receiving forgiveness through IDR could incur roughly $6,000 to nearly $12,000 in additional federal taxes.

Some student loan borrowers who have their remaining balances forgiven this year could face thousands of dollars in additional federal taxes. And certain borrowers will be paying nearly $12,000 more, according to a new report from Protect Borrowers.

The nonprofit estimates that borrowers receiving forgiveness through income-driven repayment, or IDR, could incur roughly $6,000 to nearly $12,000 in additional federal taxes and lost tax credits, depending on their income and family size.

A temporary federal exemption that prevented many forms of canceled student loan debt from being treated as taxable income applied to discharges after December 31, 2020, and before January 1, 2026. However, it was not extended for IDR forgiveness beyond 2025.

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