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CNBC
6 days ago
- Business
- CNBC
Student loan forgiveness may soon be taxed again — here's how much borrowers could owe
President Donald Trump's "big beautiful bill," which Congress passed earlier this month, has tax implications for people who receive student loan forgiveness. Here's what borrowers expecting the loan relief should know. The American Rescue Plan Act of 2021 made student loan forgiveness tax-free at the federal level through the end of 2025. Trump's "big beautiful bill," while making other specific kinds of student loan relief tax-free, did not extend or make permanent that broader provision. In theory, lawmakers could move to protect the relief from taxes before the end of the year, but borrowers shouldn't count on it, experts say. "Republicans do not like [student loan] forgiveness, and are unlikely to make it tax-free," said higher education expert Mark Kantrowitz. Without action from Congress, student loan borrowers who get their debt forgiven under the U.S. Department of Education's income-driven repayment plans, or IDRs, would face a federal tax bill again starting in 2026. (IDR plans cap people's monthly payments at a share of their discretionary income and cancel any remaining debt after a certain period, typically 20 years or 25 years.) That tax bill at the end of repayment could be significant — the IRS typically counts forgiven debt as income, Kantrowitz said. More from Personal Finance:Trump's 'big beautiful bill' slashes CFPB funding78% say Trump's tariffs will make it harder to deal with debtTax changes under Trump's 'big beautiful bill' — in one chart The average loan balance for borrowers enrolled in an IDR plan is around $57,000, Kantrowitz said. For those in the 22% tax bracket, having that amount wiped out would trigger a tax burden of over $12,000, Kantrowitz estimates. Lower earners, or those in the 12% tax bracket, would still owe around $7,000. Borrowers could also be on the hook for state taxes following their student loan forgiveness. (Many states mirror the federal government's tax policy on student loans, meaning more states may start to levy the aid next year as well, experts say.) Consumer advocates have long criticized the practice of taxing borrowers on their student loan forgiveness. They say that borrowers who enroll in IDR plans tend to struggle to keep up with their bills, and that the government's policy often wipes away one's student debt just to saddle them with a tax debt. "Forcing borrowers to remain drowning in debt is cruel," said Persis Yu, deputy executive director and managing counsel at the Student Borrower Protection Center. The "big beautiful bill" did permanently make it so that student loan forgiveness in cases of death or disability are tax-free, Kantrowitz said. Employees who receive help from their company paying down their debt also won't owe any taxes in the future on that relief, due to the legislation, he added. The current allowable annual tax-free contribution from firms is $5,250, but that amount will increase with inflation. Public Service Loan Forgiveness has always been, and will continue to be, tax-free on the federal level, under its terms. (It's possible your state will tax you on the aid). That program allows government and certain non-profit workers to get their debt excused after a decade of payments.
Black America Web
7 days ago
- Business
- Black America Web
Student Loan Forgiveness Paused for IBR Borrowers
Source: Deepak Sethi / Getty Millions of student loan borrowers enrolled in a popular repayment plan are now facing uncertainty, as the U.S. Department of Education has temporarily halted loan forgiveness under its Income-Based Repayment (IBR) program. Income-driven repayment plans like IBR aim to ease financial pressure by capping monthly loan payments based on a borrower's income and family size. After 20 years of qualifying payments, borrowers become eligible for loan forgiveness. At the end of 2024, nearly 40% of the 33 million Americans repaying student loans were enrolled in one of the Education Department's four IDR plans, according to federal data. But legal challenges have disrupted all four plans. Three of them, the SAVE (Saving on a Valuable Education) plan, Income-Contingent Repayment (ICR), and Pay As You Earn (PAYE) were previously blocked by court rulings. And now, the IBR plan has also been affected. As of this week, forgiveness for approximately 2 million borrowers enrolled in IBR has been paused. The Department of Education confirmed the pause Tuesday, citing ongoing court injunctions related to lawsuits against the Biden administration's SAVE plan. 'The Department has temporarily paused discharges for IBR borrowers in order to comply with ongoing court injunctions regarding the Biden Administration's illegal attempts at student loan forgiveness,' said Education Department deputy press secretary Ellen Keast in a statement to CBS MoneyWatch. The lawsuits stem from the Biden administration's implementation of the SAVE plan — a sweeping repayment initiative designed to fix flaws in existing IDR programs. SAVE became highly popular, enrolling nearly 8 million borrowers by the end of 2024. Because the SAVE plan included provisions allowing borrowers to count forbearances and certain non-payments toward loan forgiveness, it also affected forgiveness eligibility in the IBR plan. As a result, the Education Department is now recalculating eligible payment counts and has paused all IBR loan discharges until the process is complete. The Education Department has not provided a specific timeline for when loan forgiveness under the IBR plan will resume. However, Keast said discharges will restart 'as soon as the Department is able to establish the correct payment count.' Are Other IDR Plans Affected? Yes. Forgiveness under the SAVE, ICR, and PAYE plans remains blocked by court decisions that questioned whether the Education Department had the legal authority to offer widespread forgiveness under those programs. However, the IBR plan, created under a different legal authority, is still considered valid, though it is now on pause due to the SAVE plan's entanglement. What Should Borrowers Do? Borrowers enrolled in IBR are encouraged to continue making their monthly payments. Even if their forgiveness is delayed, those who are already eligible will be refunded for any overpayments once discharges resume. 'For any borrower that makes a payment after the date of borrower eligibility, the Department will refund overpayments,' Keast said. Borrowers may also request forbearance through their loan servicer, though doing so may result in interest continuing to accrue on their remaining balance. Income-Based Repayment Forgiveness Delayed; What Borrowers Need to Know was originally published on
Time of India
7 days ago
- Business
- Time of India
Student loan forgiveness under IBR plan temporarily paused in the US: What borrowers need to know now
In a development impacting millions of student loan borrowers across the United States, the Department of Education has temporarily paused loan forgiveness under the Income-Based Repayment (IBR) plan. The decision comes amid a series of legal and administrative challenges stemming from ongoing lawsuits targeting the Biden administration's broader student loan relief efforts. Roughly 2 million borrowers enrolled in IBR, one of the oldest and most widely used federal income-driven repayment (IDR) plans, are affected by this pause. The move reflects a growing legal entanglement involving multiple federal repayment programs and has added to the uncertainty surrounding student loan forgiveness. Why has IBR forgiveness been paused? The pause follows federal court injunctions issued in response to legal challenges over the SAVE (Saving on a Valuable Education), ICR (Income-Contingent Repayment), and PAYE (Pay As You Earn) plans. Although the IBR plan was initially unaffected, being established under different legal authority, it is now temporarily included in the freeze due to overlapping issues with how payments are counted across IDR programs. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like TV providers are furious: this gadget gives you access to all channels Techno Mag Learn More Undo The Department of Education has stated that it is working to recalculate payment histories to ensure that discharges are accurate and legally compliant. This recalibration is necessary because SAVE-related discharges could influence eligibility calculations under other IDR plans, including IBR. What the IBR forgiveness pause means Borrowers enrolled in the IBR plan who have either completed or are nearing the 20- or 25-year repayment threshold are the ones most likely impacted by the current pause. While loan forgiveness has been temporarily suspended, these individuals are still considered eligible for discharge once the Department of Education completes its recalculations. Despite having technically qualified for forgiveness, borrowers are advised to continue making their scheduled payments. Halting payments without official confirmation could lead to missed qualifications or accrued penalties. For those facing financial difficulty, forbearance remains an option, but it's important to note that interest will continue to accrue during that period. The Department of Education has reassured borrowers that no payments made beyond the forgiveness point will be lost. Once discharges resume, any overpayments made during the pause will be refunded. Importantly, this administrative hold does not mean the IBR plan is ending. The program remains in effect, and both its repayment structure and eligibility rules are unchanged—the pause applies only to forgiveness processing, not to enrollment or payment terms. Borrowers are encouraged to check their loan status regularly via their loan servicer or the official Federal Student Aid website and stay updated on the Department's announcements. How to respond to the pause The Department of Education has issued the following guidance for borrowers affected by the pause: Continue making payments: Payments made during this pause will still count toward forgiveness. Refunds guaranteed: Any payments made after reaching forgiveness eligibility will be refunded once the loan is discharged. Forbearance is an option: Borrowers experiencing financial hardship can request a temporary forbearance, although interest will continue to accrue during this time. Stay updated: No firm timeline has been given for when forgiveness will resume, but the Department has assured that eligible discharges will proceed once the recalculations are complete. What's next? As the Department of Education continues to navigate legal and logistical hurdles, many borrowers are left in limbo. For those who have faithfully made payments for decades, the delay is both financially and emotionally taxing. This situation underscores the complexity of the US student loan system, where overlapping repayment programs, shifting legal rulings, and evolving administrative policies can quickly upend expectations. More than 33 million borrowers are enrolled in federal income-driven plans, and the outcome of this recalibration effort could set important precedents for how forgiveness is implemented across the board. TOI Education is on WhatsApp now. Follow us here . Ready to navigate global policies? Secure your overseas future. Get expert guidance now!
The Sun
23-07-2025
- Automotive
- The Sun
VinFast launches all-electric VF 7 suv in Indonesia
JAKARTA, INDONESIA - Media OutReach Newswire - 23 July 2025 - VinFast today officially introduced and began sales of the VF 7, a C-segment all-electric SUV with right-hand drive, in Indonesia. The VF 7 marks the fifth model in VinFast's lineup for the archipelago nation, solidifying the Company's position as a leader with one of the most diverse ranges of EVs. The VF 7 aims to offer a well-rounded experience for urban Indonesian users, combining a thoughtful design, modern technology, solid performance, and accessible price. The VF 7 is making its debut in its third market with two distinct versions: the VF 7 Eco and the VF 7 Plus. In Indonesia, the VinFast VF 7 Eco is priced from IDR 499,000,000 (on-the-road, battery included), while the Plus version is offered at IDR 599,000,000 (on-the-road, battery included). An early bird price of IDR 468,000,000 for the Eco and IDR 568,000,000 for the Plus will apply to the first 200 customers who receive delivery, or to those who take delivery by September 1, 2025 (whichever comes first). VinFast also applies complimentary charging at VinFast stations operated by the global charging station development company V-GREEN until March 1, 2028. In terms of after-sales, the VF 7 is backed by one of the best warranty policies in its segment, offering a vehicle warranty of 10 years or 200,000 km (whichever comes first). Customers can place orders for the VF 7 at VinFast's nationwide dealership showrooms or directly at the Company's booth at the Gaikindo Indonesia International Auto Show (GIIAS) 2025, which opens for public from July 24 to August 3. The first VF 7 vehicles are expected to be delivered to Indonesian customers this year. VinFast will also bring a variety of attractive promotional programs to GIIAS 2025. For the latest VF 7 model, the first 125 customers who place an order at the event will receive a voucher worth IDR 7,000,000, redeemable for flight tickets at (the gift will be presented at the time of vehicle delivery). Customers purchasing the VF 3 will receive accessory upgrade voucher valued at up to IDR 5,000,000 and VF 5 customer get upgrade to light alloy wheels. Meanwhile, those ordering the VF e34 or VF 6 will be offered travel vouchers worth up to IDR 6,000,000. Mr. Kariyanto Hardjosoemarto, CEO of VinFast Indonesia, shared, 'We are immensely proud to mark a significant milestone in the Indonesian market today. With the launch of our fifth model, VinFast is rapidly establishing the most diverse all-electric product range in the archipelago. By leveraging our versatile product lineup and comprehensive 'For a Green Future' ecosystem, we aim to meet every transportation and financial need while powerfully inspiring the shift toward green mobility in Indonesia, creating a sustainable and prosperous future.' Both VF 7 Plus and VF 7 Eco feature the 'Asymmetric Aerospace' design language, penned by the renowned Italian studio Torino Design. This aesthetic vision embodies freedom, technology, and a forward-thinking, individualistic style. The VF 7's exterior is defined by the signature VinFast 'V' LED light strips at the front and rear, creating an unmistakable visual identity. A sloping coupe-style roof, large wheel arches, and alloy wheels up to 19 inches in size contribute to its powerful and athletic stance. With optimal dimensions (4,545 mm length, 2,840 mm wheelbase, 1,890 mm width, 1,635.75 mm height, and 190 mm ground clearance), the VF 7 offers a spacious, airy cabin with premium leather-upholstered seats. The interior is driver-centric, highlighted by a 12.9-inch touchscreen, a heads-up display (HUD), a unique two-tone D-cut steering wheel, and gear selector buttons that evoke the elegance of piano keys. The VF 7 offers a choice of five exterior and two interior colors, with the Plus version featuring a two-tone interior palette for personalized style (For accurate details and availability, please check with your local dealers). In terms of performance, the VinFast VF 7 Plus is equipped with two electric motors delivering a maximum total output of 260 kW (equivalent to 349 horsepower) and 500 Nm of peak torque. Its all-wheel-drive system makes it one of the most powerful vehicles in its class. Paired with a 70.8 kWh battery, the car boasts a maximum range of up to 471 km per full charge (NEDC standard). The VF 7 Eco, meanwhile, features a single electric motor with a maximum output of 130 kW (174 horsepower), 250 Nm of peak torque, and a 59.6 kWh battery, allowing for a maximum range of 430 km per full charge (NEDC standard). The Plus model is ready for long-distance travel and speed enthusiasts, while the Eco model is a stylish, versatile choice for urban commutes. The VF 7's commitment to safety is underscored by its 7 airbags and a full suite of advanced active safety systems, including Anti-lock Braking System (ABS), Electronic Brakeforce Distribution (EBD), Brake Assist (BA), Electronic Stability Control (ESC), Traction Control System (TCS), Hill Start Assist (HSA), and Roll Over Mitigation (ROM). The Plus version further elevates the driving experience with an advanced ADAS package, including 17 advanced features including: Highway Assist, Traffic Jam Assist, Auto Lane Changing Assist, Emergency Braking and 360 Surround View Monitoring. VinFast will also provide complimentary over-the-air (OTA) updates for additional features, ensuring the vehicle is always equipped with the latest technology. VinFast's rapid expansion in Indonesia, encompassing popular segments from the VF 3, VF 5, VF 6, VF e34 to the VF 7. The products are supported by attractive sales and after-sales policies, including free charging at V-GREEN stations, and 0% interest financing. VinFast is also actively collaborating with dealership, service center, and banking partners to make green transportation accessible to all./.
CNBC
23-07-2025
- Business
- CNBC
Student loan forgiveness paused under a popular repayment plan. Here's what to know
The U.S. Department of Education has temporarily paused debt forgiveness under a popular repayment plan for student loan borrowers. In an FAQ on the department states that loan forgiveness for borrowers enrolled in the Income-Based Repayment plan is on hold while it responds to court orders. IBR is one of the department's income-driven repayment plans, also called IDRs. Congress created the first IDR plans back in the 1990s to make student loan borrowers' bills more affordable. The plans cap people's monthly payments at a share of their discretionary income and cancel any remaining debt after a certain period, typically 20 years or 25 years. More from Personal Finance:Trump's 'big beautiful bill' slashes CFPB funding78% say Trump's tariffs will make it harder to deal with debtTax changes under Trump's 'big beautiful bill' — in one chart IBR will be one of only a few repayment options left to millions of borrowers, after recent court actions and the passage by Congress of President Donald Trump's "big beautiful bill." That legislation phases out several income-driven repayment plans. Here's what to know about the delay in debt relief for IBR borrowers. Student loan forgiveness is paused for IBR borrowers because of court actions involving the Biden-administration-era SAVE, or Saving on a Valuable Education, plan, the department said. Former President Joe Biden touted SAVE as the most affordable income-driven repayment plan in history, but its generous terms soon became a point of controversy for Republicans. In February, the 8th U.S. Circuit Court of Appeals sided with GOP-led states that sued to block the SAVE plan rule, which had sweeping impacts on student loan repayment. For example, under the rule, certain periods during which borrowers postponed their payments would count toward their forgiveness timeline. With SAVE blocked, borrowers no longer get credit during those forbearances. "So the U.S. Department of Education will need to make changes to the qualifying payment counts," said higher education expert Mark Kantrowitz. Ellen Keast, deputy press secretary at the Education Dept., said IBR discharges would resume "as soon as the Department is able to establish the correct payment count." The hold on IBR discharges shouldn't impact student loan borrowers who are still years away from debt forgiveness, experts said. However, they may not receive credit for any periods during which their bills were paused. If you're pursuing debt erasure under IBR, your payments made under the plan (or another income-driven repayment plan) will still be bringing you closer to debt cancellation, as long as you are enrolled in IBR when you become entitled to that relief. If you expected your debt to be forgiven shortly, you should continue making payments, Kantrowitz said. You don't want to be flagged as late. "Any excess payments will be refunded," Kantrowitz said.
