Warren praises IRS move to expand tax relief for people with discharged student loans

Warren praises IRS move to expand tax relief for people with discharged student loans
© Greg Nash

Sen. Elizabeth WarrenElizabeth Ann WarrenBiden looks to shore up lead in S.C. Hillicon Valley: Dems cancel surveillance vote after pushback to amendments | Facebook to ban certain coronavirus ads | Lawmakers grill online ticketing execs | Hacker accessed facial recognition company's database Push for national popular vote movement gets boost from conservatives MORE (Mass.), a Democratic presidential candidate, on Friday praised the IRS and Treasury Department's decision to provide tax relief to more people with discharged student loans.

"Predatory for-profit colleges have cheated hundreds of thousands of students who were trying to build a future, and those student loan borrowers shouldn't have to pay taxes on their cancelled student loans," Warren said in a statement released by her Senate office. "I successfully fought for the tax exemption granted to students defrauded by Corinthian College in 2015, and I'm glad Treasury and the IRS are expanding these guidelines to protect more students from additional hardship."

The Treasury and IRS on Wednesday released guidance under which certain taxpayers with discharged student loans will not have to report the loan amounts as income on their federal tax returns.

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The guidance applies to taxpayers whose loans were discharged by the Department of Education because they were attending a school that closed or one that engaged in misconduct that violated state laws. It also applied to taxpayers whose private loans were discharged because of legal settlements against schools and certain private lenders.

The guidance is an expansion of earlier guidance that Treasury and the IRS issued that provided tax relief to students who had discharged loans that had been used to finance attendance at the now-defunct, for-profit Corinthian College and American Career Institutes. Warren was one of several Democratic lawmakers who had pushed the agencies to issue that earlier guidance providing tax relief to students whose loans were discharged after their schools had defrauded them or closed.

Warren, a top-tier White House hopeful, pledged earlier this week to take executive action to cancel most student loans if elected.