Sacramento, CA – Assemblymember Mike Fong (D-Alhambra) introduced AB 26 to exempt up to $20,000 in federal student loan forgiveness from state taxes. The bill aims to maximize the benefits of the federal student loan debt relief plan.
“Federal student loan debt relief is a crucial piece of California’s economic recovery from COVID-19 pandemic. AB 26 ensures that Californians who qualify for federal student loan debt relief will not pay any state taxes. We must do all we can to support the millions of Californians who are working hard to get back on their feet and contribute to the economy,” said Assemblymember Mike Fong.
The federal student loan debt relief plan proposed by President Joe Biden is currently stalled pending federal court proceedings. If implemented, the plan will discharge up to $20,000 for individuals who received a Federal Pell Grant and meet the federal income requirements for debt cancellation, and up to $10,000 for individuals who have not received a Federal Pell Grant and meet the federal income requirements. An estimated four million Californians are eligible for the program.
Assemblymember Mike Fong introduced AB 26 immediately after being sworn in during the 2023-24 Organizational Session for his first full term in the Assembly. He was elected in February 2022 in a special election following the resignation of former Assemblyman Ed Chau, who was appointed as a Los Angeles County Superior Court Judge.
