New York state could soon be providing some tax relief for people who are carrying federal student loan debt.
A bill approved this week in the Democratic-controlled state Senate is meant to ensure student loan forgiveness programs would be exempt from state income taxes.
The measure, yet to pass in the Democratic-led Assembly, comes as a federal student loan forgiveness program announced by President Joe Biden is facing a tangle of legal challenges.
If the federal student loan forgiveness program clears those legal hurdles, the measure is designed to ensure people who have their debt forgiven will not pay additional state taxes as a result.
“Relieving student debt is critical for so many across New York,” said Senate Deputy Leader Michael Gianaris. “It should not turn into a cash grab by the state. This is an important step in making it easier to access the higher education and career training New Yorkers need and deserve.”
More than half of the students who graduate from New York's more than 300 colleges and universities have student loan debt of more than $30,000.
The federal plan would provide debt relief for people whose income is less than $125,000. For people with Pell Grants, debt relief will be provided for up to $20,000 and up to $10,000 for non-Pell beneficiaries.