HARRISBURG, Pa (WTAJ) – Pennsylvania Governor Tom Wolf announced Friday, Dec. 17, that students won’t have to pay state income tax on student loan debt relief programs.
There are two current programs that will be eligible for the potential thousands in savings. The federal Public Service Loan Forgiveness (PSLF) program and the Pennsylvania Student Loan Relief (SLRN) for nurses program.
The PSLF program permits direct loan borrowers who make 120 monthly payments under a qualifying repayment plan while working full-time for a qualifying employer to potentially have the remainder of their student loans forgiven. Qualifying employers include federal, state, and local and tribal governments, as well as non-profits.
The SLRN is a program for nurses in Pennsylvania who worked to fight the COVID-19 pandemic and continue in the nursing profession by relieving some of their student loans.
“The point of student loan forgiveness programs for public servants is that these are people who have chosen jobs, often in lower paying fields, because they want to make a difference,” said Gov. Wolf. “It’s wrong to take what should be a blessing and turn it into just another burden.
As an example, if a Pennsylvania student owed $50,000 in student loans and as a part of PSLF, they would save $1,535 on their state income tax bill.
“As a commonwealth and as a nation, we can’t afford for astronomical student loan debt to keep talented people from choosing to serve as teachers, firefighters, or nurses,” Gov. Wolf said. “We need to make sure that financial burdens don’t keep our best and brightest from taking on some of our most important jobs. Ensuring that student loan forgiveness through the PSLF and SLRN programs is not considered taxable income will remove one more barrier for Pennsylvanians who are working to make a difference in our communities.”