Porter reminds Hoosiers to prepare for student loan repayments, recalls his bill to end state taxation of student loan relief
After a three year pause due to the COVID-19 pandemic, student loan repayments are set to begin again in October. These federal loans resumed accruing interest on Sept. 1.
Last session, State Rep. Gregory W. Porter (D-Indianapolis) filed a bill which would have prohibited the state from classifying forgiven student loans as taxable income. This bill came after President Joe Biden’s cancellation of student debt, which was struck down by the United States Supreme Court this summer.
Porter issued the following statement ahead of federal student loan repayments beginning again:
“More than 900,000 Hoosiers currently have some form of student loan debt, with the average Hoosier owing about $32,000. With repayments beginning soon, many Hoosiers will face financial stress, a stress the Republican supermajority has done nothing to ease for constituents.
“Indiana is one of the few states that taxes an individual’s student loan forgiveness or an employer paying off the student loan for an employee. Last session, my bill to make loan forgiveness dollars exempt from taxation never received a hearing. This is a shame, because Indiana Republicans never shy away from dispensing tens of millions of dollars in tax credits to large companies seeking move to Indiana but refuse to take action to make conditions better for Hoosiers living and working in our state.
“Had President Biden’s efforts to forgive student loans been upheld by the Supreme Court, Republican policies would have harmed Hoosier borrowers. The Legislative Service Agency estimated that, had Biden’s policy withstood the Court, Hoosiers would have been forced to pay income taxes on either the $10,000 or $20,000 in federal relief they were provided. This is money they would not have to pay if they lived across state lines in Illinois or Ohio. The supposed party of lower taxes seemingly goes out of their way at every opportunity to raise taxes for Hoosiers, and often without using those dollars to enhance the quality of life for those in our state.
“As we prepare for federal student loan repayments to resume, there are several things borrowers should remember. First, please do not ignore any messages you receive about repayment. If you have questions or need more details regarding your repayment plan, please reach out to your federal student loan service provider. It’s also important to note that, during the pandemic, the U.S. Department of Education changed some of its contracts with federal student loan service providers. Due to this, your payments might be going to a different entity once repayments start. If you’ve moved or have a new email address, it’s important to make sure your contact information is correct by going to StudentAid.gov.
“As we gear up for the 2024 session of the Indiana General Assembly, I look forward to working to provide Hoosier borrowers with some much-needed economic relief and ensure any federal student loan relief Hoosiers see in the future is exempt from taxes.”