8 Pages Posted: 22 Sep 2016
Date Written: August 1, 2016
There are several ways that a student loan borrower can have a federal student loan discharged. In some cases, that cancellation of student debt creates taxable income, but in others it does not. This Article argues that taxing cancellation of student debt undermines the purposes of loan discharge and income-driven repayment programs like IBR and PAYE. This Article further argues that, if Congress does not act to provide a clear exclusion, Treasury has sufficient statutory and common law authority to exclude that income, and that it should do so.
JEL Classification: K34
Suggested Citation: Suggested Citation
Brooks, John R., Treasury Should Exclude Income from Discharge of Student Loans (August 1, 2016). Tax Notes, Vol. 152, No. 5, 2016. Available at SSRN: https://ssrn.com/abstract=2841424