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HB 842

Income tax; exclude forgiven, cancelled or discharged federal student loan debt under the PSLF Program from the definition of "gross income".

2026 Regular Session Introduced by Bob Evans

Mississippi would exempt federal student loan debt forgiven through the Public Service Loan Forgiveness Program from state income taxation, reducing tax liability for affected public service employees.

Referred To Ways and Means
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Bill Summary · HB 842

Legislative bill overview

HB 842 would exclude federal student loan debt forgiveness received through the Public Service Loan Forgiveness (PSLF) Program from Mississippi state income tax calculations. This means borrowers who have their loans forgiven after 10 years of qualifying public service payments would not owe state income tax on the forgiven amount.

Why is this important

The PSLF Program forgives remaining loan balances for public servants (teachers, nurses, government workers, etc.) after meeting requirements. Without this exclusion, Mississippi borrowers would face unexpected state tax bills on forgiven debt—potentially thousands of dollars in additional taxes on what they already consider relief. This directly affects the financial benefit of the PSLF Program for Mississippi residents in public service.

Potential points of contention

  • Revenue impact: The state loses tax revenue on forgiven debt amounts, potentially affecting education or other state budgets depending on the number of affected borrowers
  • Fairness questions: Whether forgiving state taxes on loan forgiveness is equitable to other workers or those who paid off loans without PSLF benefits
  • Scope limitations: The bill only covers PSLF forgiveness; unclear whether other federal forgiveness programs (income-driven repayment plans, disability discharge) would also be excluded

Compiled from official sources — confirm details with the bill’s official record.

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