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Posted in Student Loans
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Question By
ssmeaton

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effect of discharged student loans by disabled person
tax implications

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Student Loan discharged

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I had my loan discharged last December, 2013.  No tax implications.  

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Reply by
3red3red

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Everyone's tax situation is different and for some of us, there are tax implications.  This is clearly stated on the application for Discharge.  I had been told many things, the majority of which was don't worry about it.

 I had Federal Student Loans discharged due to Full-time Permanent Disability in 2013.  In January 2015, I received a 1099C from the Department of Education showing the full amount of the discharged loans as Income.  For the calendar year 2014, and although I have no earned income from employment, I owed the IRS approximately 20% of the full amount discharged in federal income taxes.

Pretty ironic when the whole reason for Discharge is becuase you are disabled, have no earned income from employment and cannot work

Reply by
UncleBob808

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This is real good information about being "no tax implications" but did you notice if your credit report benefited by the discharge also ?

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