DEFEATING RUMPELSTILTSKIN: WHY THE TEMPORARY PROVISION THAT EXCLUDES STUDENT LOAN FORGIVENESS FROM GROSS INCOME SHOULD BE MADE PERMANENT

Authors

Josh Cohron, Mississippi College School of Law

Publication Date

Fall 2023

Abstract

Despite the advances in higher education that have been made in the United States over the years, there is still a crisis in this country concerning student debt and its fallout. One aspect of the student debt crisis that has the potential to loom over many individuals is the taxation of student debt forgiveness. Up until March 11, 2021, when all or part of one’s student debt was discharged, the amount was taxed as ordinary income for the year in which it was forgiven. Fortunately, on that date, the American Rescue Plan Act of 2021 was passed which included a provision that temporarily excludes forgiven student debt from gross income. This development may seem trivial given the myriad of important problems to be addressed in the United States. Remarkably, the story of Rumpelstiltskin provides a fitting context for why the tax-free forgiveness of student debt should be at the forefront of our consideration.

Recommended Citation

Cohron, Josh (2023) "DEFEATING RUMPELSTILTSKIN: WHY THE TEMPORARY PROVISION THAT EXCLUDES STUDENT LOAN FORGIVENESS FROM GROSS INCOME SHOULD BE MADE PERMANENT," Mississippi College Law Review: Vol. 41: Iss. 3, Article 10.
Available at: https://dc.law.mc.edu/lawreview/vol41/iss3/10