Synopsis:

The text of S. 405 was included in H.R. 1, which was signed into law by President Trump on Dec. 22, 2017.

S. 405 exempts private student loans discharged due to death or permanent disability from federal income tax. Previously, the loan forgiveness counted as income, creating tens of thousands of dollars in tax liability. The bill sponsors argued that the tax on discharged loans was unnecessary, inhumane and prevented the Department of Education from streamlining the loan forgiveness process. The bill also resolves an inconsistency in the Higher Education Act of 1965. While parents were allowed to discharge federal loans if they themselves develop a disability or their child died, the law did not apply if their child developed a permanent disability. S. 405 itself did not pass; its text was included in H.R. 1, the Tax Cuts and Jobs Act, which became law in late December.

Supporters:

Sens. Christopher Coons (D-Del.), Angus King (I-Maine), Rob Portman (R-Ohio); American Legion, Student Veterans of America, American Council of Education, Consortium for Citizens with Disabilities, Christopher and Dana Reeve Foundation, Autistic Self Advocacy Network, National Down Syndrome Congress, The Arc, Association of University Centers on Disabilities, National Consumer Law Center et al.

Opponents:

None reported.

Links to Additional Resources: