As part of the new stimulus bill, the Senate passed a provision that makes student loan forgiveness tax-free through the end of 2025.

During Joe Biden's campaign for President, he talked about student loan forgiveness of $10,000 per borrower. A provision in the latest stimulus bill outlines a plan that would make any future student loan forgiveness be tax free. Up until now any loan forgiveness was considered taxable income so you'd get hit with a big tax bill at the end of the year.

"In the past student loan forgiveness was considered cancellation of debt and it's added to adjusted gross income so someone who is in the 22% tax bracket, a $10,000 cancellation of debt is going to add $2200 to their taxable income," said Andrew Reigstad, TAX 29.

Some believe this provision will pave the way for Biden's plan for student loan forgiveness. If that does happen consumer advocates say it could clear the balances of a third of all student loan borrowers.

"It's a huge weight lifted off an individual's shoulders especially with the amount of student loan debt we have in this country, 1.5 trillion dollars it's the second highest loan debt behind mortgages," said Victor Russell, Apprisen Financial.

Student loan payments have already been frozen for some time because of Covid.

They are expected to resume in late September.