After the announcement of President Biden's student loan forgiveness plan, borrowers could see up to $20,000 of their debt forgiven, but it may cost them down the line.
State tax may be charged to the debt forgiveness, tax laws vary from state to state.
States confirm plan to tax student loan handout funds https://t.co/IsA8Y4HhhK
— Fox News (@FoxNews) September 9, 2022
Former Mississippi State college student Dee Stegall was initially excited when he found out he would be receiving $20,000 in student loan forgiveness, but the excitement didn't last too long.
"Within 24 hours, those feelings get complicated, because then you realize that depending on what state you're in – Mississippi – you could potentially be paying taxes on that," Stegall said.
Forgiven debt is taxed like its money you earned when you complete your income tax return.
The amount of money taxed would be small compared to the benefits the borrowers have received.
"If you had to pay $1,000 of income tax in Mississippi or $20,000 plus interest over time, you know what the thousand dollar tax bill is a blessing," Steve Rhode, a consumer debt expert, said. Rhode also pointed out that it's early in the student debt forgiveness plan and things can change.
So far, Mississippi, Minnesota, Wisconsin, Massachusetts, Arkansas, Indiana and North Carolina have announced plans to tax the student loan handout funds, according to Fox News. But if you file in Virginia, Idaho, New York, West Virginia, Pennsylvania and Kentucky, don't expect to be taxed.
Trending News
Famous Actor Converts to Catholicism After Studying it for Role in Movie
Hollywood actor Shia LaBeouf has converted to Catholicism after studying it for a role in the movie "Padre Pio."
LeBeouf's exposure to Catholicism while living with a monastery of Franciscan Capuchin friars in order to better understand the role of St. Padre Pio, who he was playing in the movie.
Moderna Sues Pfizer Over COVID Vaccine
Moderna is filing a lawsuit against Pfizer-BioNTech in U.S. and German courts on Friday. They are alleging patent infringement during the development of their COVID vaccine.
Pfizer's vaccine was the first to be approved for emergency use and it has been given hundreds of millions of times in the nearly two years since it was approved. The two pharmaceutical giants used the same technologies to create their vaccines and Moderna arguest Pfizer did not have the right to use it.
Two More States Follow California's Ban on Gas Cars
NBC Poll Reveals New Least Popular Political Figure
West Virginia Senator Joe Manchin is the least popular political figure in a poll released by NBC News with only 11% of registered Democrats having positive feelings about him.
Just over one-third, 34%, have negative feelings about Manchin, giving him a 23% net-negative, the lowest in the country.
WATCH: Kamala Impersonator has Mastered 'The Cackle'
Yankees Fan Divides a Nation with Astonishing Hot Dog Trick
The New York Yankees defeated the New York Mets on Monday, but it's a controversial move by a Yankees fan at the game that everyone is still talking about.
A viral video showed the fan hollowing out both ends of a hot dog with a straw. The maverick then put it in the beer and use it as a straw.