Democratic senators have introduced a bill to prevent students from being taxed on forgiven loans in cases where they were victims of fraud.
The introduction of the Student Tax Relief Act comes after the Department of Education started forgiving the loans of former students of Corinthian Colleges Inc., a for-profit college that went out of business. Corinthian was found guilty of defrauding students around the country (233 DTR G-4, 12/4/15).
“Students who are defrauded by their college or university deserve a chance to start over and build a future for themselves,” Sen. Dianne Feinstein (D-Calif.), a sponsor of the bill, said in a statement. “It will be much easier for them to do so if they don’t face a significant tax burden from their forgiven loans.”
Co-sponsors of the measure include Sens. Debbie Stabenow (D-Mich.), Tammy Baldwin (D-Wis.), Jeff Merkley (D-Ore.) and Jeanne Shaheen (D-N.H.).
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