Beginning January 1, 2026, balances forgiven under income driven repayment plans will generally be treated as taxable income. This means that if a borrower reaches the end of their 20 or 25 year repayment term after the tax exclusion expires, the forgiven amount could be added to their taxable income for that year. For many people, this shift could create an unexpected and substantial tax bill.

IRS staff drops by 25%. Learn how these cuts could affect your tax refunds, audits, and IRS communication in 2025 and beyond.

The IRS will only share taxpayer data with ICE in deportation or criminal cases. Learn what this means for immigrant taxpayers