So my student loans are finally eligible for discharge
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Anonymous
| Two freaking months after the damn federal exemption for taxation of discharged student loans expired. Just my luck . And no not public service so no exception for me |
Anonymous
| Why not just pay the debt you chose to assume? |
Anonymous
Because you don't have to? Why would you pay money you don't owe? |
Anonymous
Honor. Your word. You signed for that debt. |
Anonymous
because you do owe it |
Anonymous
I don't like debt either but why would anyone not take advantage of any legal loopholes? Don't you take the tax deductions you're entitled to take? The result for the OP seems fair, she met he requirements for discharge, is getting the discharge which is free money and therefore has to pay taxes on that gift. |
Anonymous
I assume OP is getting the debt discharged under some form of income-based repayment after 20ish years of payments. That program functions as a modification of the existing contract that OP signed so OP is paying pursuant to the terms of the loan agreement. |
Anonymous
Nope, you don’t. These forgiveness programs are part of the master promissory notes. Borrowers took on this debt knowing these programs were in place, and the government advertised these programs to borrowers. |
Anonymous
The forgiveness programs existed at the time of borrowing. |
Anonymous
| Dude. Just pay the tax and be grateful. I paid all my loans like most people. |
Anonymous
People are dishonest and they feel entitled that someone else or Govt is supposed to pay their debt when they assumed it. People get very resentful and angry because they got a degree after paying a lot of money and Govt is not helping them now. |
Anonymous
Huh? The government issued the loans and the government provided a program to forgive them. There is nothing dishonest about it. OP consult with a tax professional because there may be a way to mitigate the tax impact. When I was in this position the rules on insolvency applied to me and I did not have to pay any taxes. There may also be ways to strategically time the discharge and get new debt (eg a mortgage or home equity loan) to get the tax break. |
Anonymous
lol. like Trump, famous for not paying his debts. |
Anonymous
| All the POSs claiming it is a moral failure to use a federal program to which they are entitled by law will happily take all the tax deductions and federal grants and contracts they can get. Remember the forgivable COVID loans that went to wealthy people? Gmafb |
Anonymous
| Sorry OP. I second the advice to talk to a tax professional, and see how to mitigate the impact. Especially because it’s early in the year you may have the ability to put money in various pre-tax places to lower your overall AGI. But you need professional advice, not internet judgement. |