President Joe Boden’s sweeping student loan cancellation will lower federal borrowers’ loan amounts in the coming months, but it comes with a catch in Minnesota.
Minnesota is one of 13 states that will tax the one time debt cancellation because the state’s law does not match federal tax law, according to the Minnesota Department of Revenue.
Borrowers who will have $10,000 wiped away will have to pay hundreds of dollars when they file their taxes.
The amount doubles for Pell Grant recipients, who are eligible for $20,000 in loan erasure.
State Rep. Tina Liebling said lawmakers will take up the item during the 2023 legislative session, but added a vote likely will not come until the end of the session.