Tax landmine: Forgiven student loan debt

NEED TO KNOW
  • With few exceptions, tax is owed on forgiven student loans
  • You can work out a payment plan with the IRS

If you're a teacher or work in any number of public service jobs, you're eligible to have the balance of your federal student loans forgiven after a period of on-time payments, usually 10 years. But if you have student loans forgiven for other reasons, including disability, expect a big bill from the IRS.

HLN Money Expert Clark Howard has advice for a viewer facing this situation. She had $47,000 in loans forgiven, only to get hit with a $12,000 tax bill!

Get more great money advice from Clark on Evening Express, 5 p.m. to 7 p.m. EDT on HLN.

 

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