Seal of the Governor and photo of Gavin Newsom courtesy of the Office of the Governor of the State of California.

Gov. Newsom calls on State Legislature to waive state income tax on any student loans forgiven by President Biden

President Biden’s student debt relief will not be subject to state taxes.

Today, Governor Gavin Newsom called for the Legislature to take early action to ensure any federal student debt relief provided to Californians would not be subject to state taxes. The proposal will be part of the Governor’s budget which will be released in January.

“Californians who get student debt relief shouldn’t be hit with taxes for it. This will provide up to $1.3 billion in tax relief for more than 3.5 million Californians,” said Governor Newsom. “I look forward to working closely with the legislature to get this done through early action.”

California has nearly 3,550,000 eligible borrowers, of which an estimated 2,340,600 are Pell Grant borrowers. Estimates have shown that waiving state taxes on forgiven student loan debt will provide Californians up to $1.3 billion in relief. Individually, borrowers will save on average hundreds of dollars in state taxes, and could even save as much as $1,860.

Under President Biden’s proposal, the federal government will forgive up to $10,000 in student loans for individuals making less than $125,000 per year and up to $20,000 for those who received a Pell Grant, meant for students with the largest financial need. And, President Biden’s American Rescue Plan exempts the forgiveness of student loan debt from 2021 to 2025 federal income taxes.

The article above was released by the Office of the Governor of the State of California.

Editor’s note: President Biden’s proposed student loan forgiveness program is currently blocked by order of the federal 8th Circuit Court of Appeals.

1 Comment

  1. Please, we have a chance once again to get rid of this guy. Do NOT vote for him. He’s a predator that went after his best friends wife. If his friends can’t trust him, neither can we.

    Editor’s note: this comment was edited to reflect a desired change by the author to correct a typographical error.

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