What if my student loan debt was canceled?
Usually canceled or discharged debt is considered to be income. However, if you had a federal student loan that was discharged, you probably won't be liable for that debt.
The American Rescue Plan Act of 2021 excludes from income most student loan debt forgiveness, making it tax-free. This is effective from 2021 through 2025.
Eligible loans include federal student loans, state loan programs, college or university loans, and private student loans. Types of forgiveness, cancelation, and discharge of federal loans include:
The American Rescue Plan Act of 2021 excludes from income most student loan debt forgiveness, making it tax-free. This is effective from 2021 through 2025.
Eligible loans include federal student loans, state loan programs, college or university loans, and private student loans. Types of forgiveness, cancelation, and discharge of federal loans include:
- Public Service Loan Forgiveness
- Teacher Loan Forgiveness
- Closed School Discharge
- Perkins Loan Cancellation and Discharge
- Total and Permanent Disability Discharge
- Discharge in Bankruptcy (rare)
- Borrower Defense to Repayment if a school misled you or engaged in other misconduct
- False Certification Discharge
