ASBA GR Update Student Loans & Tax Edition ASBA Gov Relations Aug 26 Biden Admin: Can We Interest You in $10,000 to $20,000*? As is probably old news by now, the Biden administration announced on Wednesday that it would forgive student loan amounts of up to $20,000 for Pell Grant recipients or $10,000 for others making up to $125,000 annually ($250,000 for households). This is of interest to school boards because the $125,000 income cap covers the vast majority of school district faculty and staff in the state. Therefore it is an opportunity that district leadership should be made aware of. As with all government programs, there are some requirements: Income of $125,000 per individual or $250,000 per household USED has said that it has income data for approximately 8 million borrowers, who will receive relief automatically Other eligible borrowers will have to fill out a brief application which is not yet available Your loans are held by the U.S. Department of Education (i.e. direct loans). Borrowers are encouraged to sign up for updates to be informed when more information and/or applications open. We will keep you up to date as we learn more about this program and how district employees may avail themselves of it. Public Service Loan Forgiveness is Also an Option Previously, Public Service Loan Forgiveness (PSLF) was also only available to those holding loans directly from USED, and not borrowers holding Federal Family Education Loans (FFEL), Perkins, or other older federal student loans. Under temporary changes to the PSLF program, borrowers who hold these types of loans are eligible to participate and receive credit for past payments. Borrowers must enroll in the PSLF program by October 31, 2022 to take advantage. This means that educators who may not be eligible for immediate forgiveness may take advantage of PSLF for immediate forgiveness or forgiveness after 120 payments as long as qualifying employment can be documented. School districts are qualifying employers under PSLF. In addition, even those who have received Teacher Student Loan Forgiveness are eligible for PSLF for additional qualifyng loans under these limited-time changes. See the PSLF website for more information IRS: Can we Interest You in $300? Also of note, the Internal Revenue Service announced this month it is increasing the educator expense deduction for teachers from $250 to $300 in 2022. Qualifying educators (essentially all certified employees or paraprofessionals working for at least 900 hours per year) can take the deduction in addition to the standard deduction. The deduction for the 2021 tax year remains $250 if you haven’t gotten around to that yet. Thanks for reading ASBA Government Relations! Subscribe for free to receive new posts. Subscribe Like Share If you liked this post from ASBA Government Relations, why not share it? Share © 2022 Arizona School Boards Association 2100 N. Central Ave. Suite 200 Phoenix, AZ 85004