Bill to Forgive Student Loan Debt Due to Death or Disability Advances Out of CommitteeImage Banner

Bill to Forgive Student Loan Debt Due to Death or Disability Advances Out of Committee

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Bill to Forgive Student Loan Debt Due to Death or Disability Advances Out of Committee

September 30, 2016

On September 21, the Stop Taxing Death and Disability Act (H.R. 5204) was one of four bills to be approved by the House Ways and Means Committee after a markup session. The bill would change current law which treats student loan and certain other debt that is forgiven due to death or disability from being treated as ordinary income by the tax code. Under current law, the amount of debt forgiven is considered income and incurs a tax liability, which is often substantial enough to undermine the benefit of having the debt forgiven. An identical bill was introduced in the Senate in April. (See WICs article,"Senate Introduces Bill to Discharge Student Loan Tax Liability in Event of Death, Disability," April 17, 2016.)