IRS and Treasury issue guidance for students with discharged student loans and their creditors

Rev Procedure 2020-11     

This revenue procedure establishes a safe harbor extending the relief to additional taxpayers who took out Federal or private student loans to finance attendance at a nonprofit or for-profit school.   

     Under the Higher Education Act of 1965 (HEA), the Closed School discharge process allows the Department of Education to discharge a Federal student loan obtained by a student, or by a parent on behalf of a student who was attending a school at the time it closed or who withdrew from the school within a certain period prior to the closing date.  The HEA provides statutory exclusions from gross income for Federal student loans discharged unde the Closed School discharge process.