<prompt> Human: I know that the forgiven amount will be taxed as income based on your tax bracket for that year it was forgiven. Ive looked at student loan gov tax sites but I couldnt find out if that amount has to be paid lump sum or will there be like a payment plan? Will money be demanded right away and taken from retirement funds, emergency fund, etc or can you make payments for that tax basically a loan again?  <response>: The amount will be added to your income in the year it is forgiven and taxed accordingly. How you pay will depend on your situation - if the amount of money youve had withheld throughout the year is more than what you owe, you may get a smaller refund. If not, you might owe. If you owe and need to go on a payment plan, you have to work that out with the IRS. 