Wednesday, April 17, 2013
NY Times: Obama's Budget Would Eliminate Taxes on Forgiven Student Debt
New York Times: Budget Would Eliminate Taxes on Forgiven Student Debt:
President Obama’s proposed budget for the 2014 fiscal year would prevent the taxation of student debt that is forgiven under federal income-based repayment plans, according to the Institute for College Access and Success. ...
Last year, Ron Lieber wrote a Your Money column about the "tax time bomb" that could face some student loan borrowers who have their federal student loans forgiven under government repayment plans aimed at helping those struggling with high education debt.
https://taxprof.typepad.com/taxprof_blog/2013/04/ny-times--2.html
Comments
It's not enough that we forgive the loans. This would rescue them from the mistake of borrowing too much to earn (or not earn) a degree that wouldn't help find them a decent paying job. We must also change the cancellation of indebtedness rules so as to restore them to the position they were in before they borrowed.
But they still have the degree. Essentially on a scholarship from taxpayers who didn't borrow more than they could repay. I am not sure what the answer is - but this bail-out seems a little ripe.
My youngest is a year out of engineering school, making good money, paying taxes and repaying his loans. He is not enthralled with this proposal either.
Posted by: air65cav | Apr 17, 2013 12:57:42 PM
air65cav:
Apparently you didn't get the message. People today are entitled to a job that is well-paying and aligns with their passions, and certainly you can understand that debt would be an impermissible encumbrance.
In all seriousness, I do appreciate that today's debt loads are burdensome, and not all cases can be dismissed as the product of imprudent decision-making by borrowers. The remedy is to unwind our student loan programs that have allowed higher education to bid up prices at the expense of hapless taxpayers and students. Loaning money to students based a school accreditation rather than actual prospects for repayment is nuts.
Posted by: Mike Petrik | Apr 18, 2013 7:43:01 AM