Key Takeaways An exemption that made student loan forgiveness tax-free ends in 2025.That means borrowers who complete the requirements for forgiveness in 2026 should prepare for a higher tax bill.Taxpayers who achieve the requirements for loan forgiveness before 2025 ends, however, will not pay taxes on it, even if their loan discharge is in 2026. If you expect to have your federal student loans forgiven in 2026, you should check now to see if you'll owe taxes on those funds. Under a temporary tax rule ...