Taxes On Forgiven Student Loans
If schools and foundations forgive your loans, those loans might not be taxable. Changes to the exclusion rules mean loans made by some schools aren’t taxed.
For the exclusion rules to apply:
- An educational institution must have made the loan.
- The loan must have been part of a program that encourages students to serve in occupations or areas with unmet needs.
- Your job must fall under one of these:
- Governmental unit
- Tax-exempt Section 501(c)(3) organization
To learn more, see these at www.irs.gov:
- Publication 525: Taxable and Nontaxable Income
- Publication 970: Tax Benefits for Education
Lucky for you there are a number of education tax credits (and deductions). Learn about the American Opportunity Credit and Lifetime Learning Credit here.
Is income from a scholarship or fellowship tax free? Learn more from the tax experts at H&R Block.
Learn how student loan debt can offset your tax return with help from the tax experts at H&R block.
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