Senator Warren’s bill to make student loan relief tax-free included in US bailout – Framingham SOURCE
Clearly, the following is a press release from the office of Senator Elizabeth Warren. She was elected by the voters of the Commonwealth of Massachusetts to serve the State of Washington DC in the United States Senate. she is a democrat.
WASHINGTON, DC – US Elizabeth Warren (D-Mass.) And Senators Bob Menendez (DN.J.) have applauded the passage of their Student Loan Tax Relief Act as part of the US bailout.
The provision makes any student loan forgiveness tax-exempt, ensuring that borrowers whose debt is fully or partially forgiven do not face thousands of dollars in unexpected taxes. The average student borrower who earns $ 50,000 in income would save about $ 2,200 in taxes for every $ 10,000 in student loans canceled.
More than 43 million Americans hold a total debt of $ 1.6 trillion in federal student loans, and many were struggling to make their payments even before the current economic crisis.
“The COVID-19 crisis is worsening massive inequalities in our economy and society, but even before the pandemic, the student loan debt crisis was already crushing millions of Americans,” Senator Warren said. “Now, when student loan borrowers get relief, they won’t be burdened with thousands of dollars in unanticipated taxes. This change allows President Biden to use his authority to write off $ 50,000 in student debt to massively stimulate our economy, help narrow the racial wealth gap, and ease that impossible burden on tens of millions of people. families. “
“Millions of Americans were already drowning under a mountain of student loan debt before they were hit by the economic impact of COVID-19. And when they have the chance to get relief, then the government shouldn’t tie a heavy fiscal anchor to their financial lifeline, ”said Senator Menendez. “We now have a tremendous opportunity to relieve this crippling weight and that opportunity should not be jeopardized by an arbitrary tax bill on unrecorded income. I hope this paves the way for President Biden to provide real debt relief that many student borrowers need and a boost to our economy that benefits everyone. “
Student loan tax relief legislation paves the way for President Biden to write off at least $ 50,000 in federal student loan debt. It will exclude from income any student loan debt that is modified or discharged from December 31, 2020 until January 1, 2026, including private and institutional loans.
The senses. Warren and Menendez introduced S496, the Student Loan Tax Relief Act, on Monday, March 1, 2021. Under current law, many forms of student debt forgiven by the federal government or other entities are considered taxable income under the Internal Revenue. Coded. As a result, people who receive some form of student debt relief could face a big surprise tax bill or even end up in a higher tax bracket, undermining the goal of the student debt relief.
Last month, Senator Warren, Leader Chuck Schumer (DN.Y.) and Congresswoman Ayanna Pressley (D-Mass.) reintroduced a resolution outlining a bold plan for President Biden to tackle the student loan debt crisis by using the existing authority under the Higher Education Act to write off up to $ 50,000 in student loan debt for federal student loan borrowers. The resolution is co-sponsored by Senators Sherrod Brown (D-Ohio), Richard J. Durbin (D-Ill.), Tammy Duckworth (D-Ill.), Richard Blumenthal (D-Conn.), Chris Van Hollen (D – Md.), Jeff Merkley (D-Ore.), Edward J. Markey (D-Mass.), Cory Booker (DN.J.), Ron Wyden (D-Ore.), Brian Schatz (D-Hawai ‘i ), Jon Ossoff (D-Ga.), Ben Ray Luján (DN.M.), Robert Menendez and Bernard Sanders (I-Vt.).
“Student loan borrowers face a massive $ 1.7 trillion in debt. When troubled borrowers can finally get relief, they shouldn’t have to swap one unaffordable government debt for another, ”said Persis Yu, director of the National Consumer Law Center’s Student Borrower Assistance Project. “This bill is particularly important for black and brown borrowers who are struggling with higher student loan debt due to the racial wealth gap, and therefore face a higher tax penalty.” We commend Senator Menendez for his leadership in ensuring that student loan borrowers can access loan relief without fear of this unfair tax penalty. “
“As America struggles to recover from the COVID-19 pandemic, the last thing student loan borrowers need is a surprise tax bill,” said SBPC Executive Director Seth Frotman. “Thanks to the leadership of Senator Menendez, millions of student loan borrowers are on the verge of paying off their debts tax-free, whether because of financial hardship or because they have been defrauded by a school predatory. “
“We applaud lawmakers for including this measure for student loan borrowers in President Biden’s bailout,” said Ashley Harrington, federal director of advocacy and senior counsel at the Center for Responsible Lending. “This will pave the way for President Biden to bring real relief to student borrowers without the fear that they will receive a huge tax bill that they cannot afford.” This particularly benefits low-income borrowers and borrowers of color who are disproportionately burdened with student debt and the negative impacts of the current health and economic crisis. Once that hurdle is lifted, President Biden should look to a blanket student debt cancellation of $ 50,000 per borrower. In doing so, it would wipe out the debt of 75% of federal student loan borrowers and provide a desperately needed economic boost that will benefit everyone. “