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However, through 2025, federal loan forgiveness under specific programs is tax-free.
He encouraged borrowers to explore all available repayment and forgiveness options while keeping tax implications in mind.
This could reduce the potential tax burden that could arise from any shifts in federal policy, he explained.
This applies to federal and certain private loans discharged under qualifying programs.
If interest remains paused or forgiven, borrowers may not have qualifying interest payments to deduct.
This could impact tax filings for those who previously relied on the deduction.
Its important to plan for potential tax implications when interest payments resume.
However,state tax treatmentmay vary, so borrowers must verify with their state tax authority.
The Trump administration has proposed eliminating the student loan interest deduction, Ruggerio said.
Additionally, Trumps administration is reviewing potential changes to the PSLF program that could impact eligibility.
Borrowers should monitor policy discussions and consider how future elections may impact student loan taxation, Ruggerio said.
These changes could impact borrowers tax filings, particularly for those choosing to file jointly or separately.
Borrowers should consult a tax professional to help maximize these opportunities, he said.
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