Full-time workers at nonprofit organizations who had their student loan debt forgiven through one of two government programs will not have a large state income tax bill to deal with when that debt is forgiven.

Gov. Tom Wolf announced at a news conference Friday that those who received student debt forgiveness through the state Student Loan Relief for Nurses program and the federal Public Service Loan Forgiveness program will be eligible to have state taxes on the amount forgiven removed.

Previously, only Pennsylvania and Missouri charged income tax on forgiven student loans.

Wolf said teachers, first responders, nurses and others considered heroes during the coronavirus pandemic and every day should not have to come up with thousands of dollars when their student loan is forgiven.

“Pennsylvania stands by the people who do so much to stand up for others,” Wolf said. “We need to make sure financial burdens do not keep our best and brightest from accepting these positions.”

He said the new action will free up money for families. “We must ensure that student loan forgiveness programs are actually living up to their promise,” Wolf said.

Kenny Bonus, owner of Bonus Accounting in Chicora, said the taxes on forgiven students loans are indeed a financial hit.

“And by having them forgiven, if the person were getting a federal refund, it does not take up that refund,” Bonus said.

He agreed that forgiving the tax burden for nonprofit workers whose student debt was forgiven is good for the economy.

“Anytime they can forgive a tax burden, I think it's a great thing,” Bonus said. “Paying less in taxes is ideal.”

State Sen. Katie Muth of Chester County said she is excited that Pennsylvania is no longer one of the two states that charges taxes on loan forgiveness.

“We're no longer an outlier,” Muth said.

She said saddling those whose student loans were forgiven with a large tax bill is bad for the economy, as that money could go toward a house, car or other item that was previously unaffordable for the families of nonprofit workers.

“I genuinely believe it is the Christmas miracle everyone has been waiting for,” Muth said.

She pointed out as a side note that corporations can get a Wells Fargo loan at 1% interest, while a constituent of hers reported she pays 13% interest on a Wells Fargo loan for nursing school.

A mother and nonprofit employee from Chester County, Gina, said she was slated to pay three times her salary for the taxes to be charged on her forgiven loans.

Gina said because her nonprofit employer of 20 years pays 40% less than employers in the private sector, she did not know how she would come up with the amount.

“I just don't have that kind of money,” Gina said.