The Student Loan Tax Relief Act would make permanent the tax exclusion for student loan forgiveness or discharge. Currently, when student loans are forgiven or cancelled, borrowers may owe federal income taxes on the forgiven amount as if it were income. This bill would change that by ensuring borrowers never have to pay taxes on any student loan that is discharged, whether those loans come from federal, state, or private sources. The legislation covers all types of education loans, including federal student loans, private education loans, and loans made by colleges and universities. The law would apply retroactively to any loan discharges that occurred after January 31, 2022, meaning borrowers who received loan forgiveness during that period could potentially benefit from the tax relief.
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