“Do unto others as we did unto ourselves” says NC Democratic leader in favor of tax forgiveness of student loan debt

State Sen. Dan Blue of Raleigh, the Senate’s Democratic leader, said he wants the state to waive income tax on forgiven student loan debt, countering the position of  Republican Senate leader Phil Berger.

Berger told reporters Tuesday that the state would not waive income taxes on forgiven student loan debt, WUNC reported.

North Carolina is one of a handful of states that will tax student debt relief, according to the Washington Post.

An estimated 1.19 million borrowers in North Carolina will be eligible for student debt relief, according to a White House estimate released Tuesday.

President Joe Biden announced last month that borrowers with federal student loans would have up to $10,000 in debts canceled and borrowers with Pell Grants for low-income families would be eligible for up to $20,000 in debt cancellations. To be eligible, borrowers must have an annual income of less than $125,000 for an individual.

Gov. Roy Cooper last week called on Republicans to waive state income taxes on the forgiven student loan debt.

Last year, the legislature voted to waive state taxes on businesses’ forgiven Paycheck Protection Plan loans.  Nearly 260,000 federal PPP loans went to businesses in the state, according to ProPublica. Businesses owned by legislators benefited from the law they passed exempting those forgiven loans from state taxes.

Blue said it was right to waive taxes on forgiven business loans, and the legislature should do the same for forgiven student loans.

“It bothers me that we still want to burden folks,” Blue said.  “We ought to be able to do unto others as we did unto ourselves,” he said, adding that he did not receive a PPP loan.

In a wide-ranging interview with reporters Wednesday, Blue and House Democratic leader Rep. Robert Reives said they were frustrated that no agreement to expand Medicaid has been reached.

Republican legislators are considering expanding Medicaid, which would make an estimated 600,000 low-income adults eligible for health insurance. The Senate bundled Medicaid expansion with changes to Certificate of Need laws in the bill it passed this year. Changes to Certificate of Needs Laws are a long-time goal for GOP senators.

North Carolina is one of a dozen states that has not expanded Medicaid.

The North Carolina Healthcare Association, which represents hospitals, is fighting Certificate of Need changes.  These laws require health care providers to gain state approval before offering new services.

The Healthcare Association made an offer last week that Berger told WUNC was “not a serious proposal.”

Reives called for face-to-face negotiations that include Democratic legislators.

“We want to get it done,” he said. “Nothing works better than deadlines and people having to face each other.”


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“Do unto others as we did unto ourselves” says NC Democratic leader in favor of tax forgiveness of student loan debt