One thing that could change the way you pay off student loans - Student Tax OPtion

Will Your Student Loans REALLY Be Forgiven?

The Biden Presidential campaign policy statement, loan forgiveness has limiting criteria:

  • Only federal loans are forgiven
    • Loan forgiveness is limited to $10,000 per year
    • Private loans are NOT forgiven
    • Federal loans are only forgiven for public colleges and universities; historically Black colleges and universities (HBCU) and minority-serving institutions (MSI)
    • Loans are NOT forgiven for loan holders with incomes above $75,000; $150,000 for married couples

There are serious difficulties with these criteria.  The one in four students who attend private colleges and universities will not have their loans forgiven, even though these are the same federal loans taken out by students at public colleges and universities.  Both use the same needs form to apply, both receive federal funds.  What does that mean?  25% of college students who attend the over 1,320 private colleges and universities are not eligible to have their loans forgiven.

All students with private loans, whether they went to public or private schools will not have those loans forgiven.  Private loans are over 9% of the total student loan debt. Students will continue to have private loan debt.

The average student loan is $33,000; at $10,000 per year it will take over 3 years to erase the average student loan amount.  Because the forgiveness reduces the principal of the loan, the student loan monthly payment remains the same, an average of $443.  So it would take over three years for a student to experience any increase in their income.

A student with an income of $75,001 is ineligible for loan forgiveness while a student with an income of $74,999 can have their loans forgiven.  Selecting an arbitrary income level for qualification is difficult to do with equity.

The administration of loan forgiveness is a massive undertaking. Many students have multiple loans and deciding which loans are forgiven is daunting.  Current loan service organizations are not prepared to undertake this task.

The Student Tax Option Act simplifies all this: federal and private loans are included; public and private school students are eligible; there are no income limits; students receive a payroll tax credit and an immediate increase in take home pay.  Support the solution at

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