Student Loan Tax Elimination Act

# Student Loan Tax Elimination Act Summary **What the Bill Would Do** The Student Loan Tax Elimination Act (HR 3165) would eliminate federal income taxes on student loan forgiveness. Currently, when student loans are forgiven through federal programs, the forgiven amount may be treated as taxable income, potentially resulting in a large tax bill for borrowers. This bill would change that by making forgiven student loans tax-free for borrowers. **Who It Affects & Key Impact** This bill would primarily benefit borrowers whose student loans are forgiven through federal forgiveness programs, such as Public Service Loan Forgiveness or income-driven repayment plans.

By removing the tax consequence of forgiveness, it could significantly reduce the financial burden on people who have their loans forgiven, allowing them to keep more of the forgiven amount rather than owing taxes on it. **Current Status** As of now, HR 3165 is in committee, meaning it has been introduced but has not yet been voted on by the full House of Representatives. The bill would need to pass through the relevant committee and receive approval from both the House and Senate before becoming law.