Bill
HR 3165
HR 3165 eliminates federal income tax on forgiven student loans, providing relief to borrowers and encouraging public service careers without tax burdens.
The Student Loan Tax Elimination Act (HR 3165) aims to alleviate the financial burden on borrowers by eliminating federal income tax liabilities associated with student loan forgiveness. This legislation is designed to support individuals who have taken on student debt, particularly those who may qualify for loan forgiveness programs, by ensuring that any forgiven amounts do not result in unexpected tax consequences.
The bill includes the following significant provisions:
Elimination of Tax Liability: The primary provision of HR 3165 is the removal of federal income tax obligations on any amount of student loan debt that is forgiven. This applies to both federal and private student loans.
Applicability: The tax elimination would apply to all forms of student loan forgiveness, including but not limited to:
Effective Date: The provisions of the bill would take effect immediately upon enactment, ensuring that borrowers can benefit from the tax elimination as soon as possible.
The Student Loan Tax Elimination Act would primarily benefit:
Borrowers with Student Loans: Individuals who have taken out federal or private student loans and are eligible for forgiveness programs.
Recent Graduates: Young professionals entering the workforce burdened by student debt who may seek forgiveness options.
Public Service Workers: Individuals working in public service sectors who qualify for PSLF and would otherwise face tax liabilities on forgiven amounts.
Introduced Date: The bill was introduced in the House on May 1, 2025.
Committee Referral: Following its introduction, HR 3165 was referred to the House Committee on Education and Workforce for further consideration.
HR 3165 represents a significant step towards reducing the financial impact of student loans on borrowers by eliminating tax liabilities associated with loan forgiveness. If enacted, this legislation could provide substantial relief to millions of Americans struggling with student debt, promoting financial stability and encouraging public service careers.
Compiled from official sources — confirm details with the bill’s official record.
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