From Yahoo Finance: 2025-04-11 13:01:00

President Trump’s second term sparks uncertainty over federal student loan policies, potentially affecting borrowers’ taxes. Changes to forgiveness programs, interest deductions, and repayment plans could reshape the tax landscape. Loan forgiveness is generally taxable income, but federal forgiveness under specific programs is tax-free until 2025.

Borrowers should explore repayment and forgiveness options while considering tax implications. Trump’s administration reviews changes to the PSLF program and student loan oversight. Income-driven repayment plans base payments on adjusted gross income, with potential changes impacting tax liability. Tax credits like the student loan interest deduction, Lifetime Learning Credit, and American Opportunity Tax Credit can reduce tax liability for eligible borrowers.

Private loan borrowers face different tax considerations and should confirm lender offerings for deductions. It’s crucial to stay informed on policy changes, consult tax professionals, and maintain detailed records for potential future tax law adjustments. Trump’s potential tax changes could impact student loan holders, making it essential to plan accordingly and understand the evolving tax landscape.

Read more: Possible Tax Changes To Be Aware of If You Have Student Loans