Federal taxes will not apply to student loans forgiven in 2025 in US, offering relief to millions of borrowers

The Trump administration has confirmed that student loan forgiveness under income-driven repayment plans like ICR and PAYE will remain tax-free at the federal level—but only until the end of 2025. Millions of borrowers face uncertainty as the temporary exemption from the 2021 American Rescue Plan Act nears expiration, while state-level taxes and blocked SAVE plan relief add further complexity.