Student Loan Borrowers with Discharged IDR Loans Face Significant Federal Tax Bills in 2026

Student loan borrowers whose debts are canceled through income-driven repayment (IDR) plans in 2026 could see their federal tax bills jump by an estimated $6,000 to $12,000. This is due to the expiration of a pandemic-era provision that exempted discharged student loan debt from counting as income for federal taxes. Low- and middle-income borrowers are expected to experience the sharpest tax increases.