You may, or may not, eventually have your student loan(s) "forgiven", BUT, , , , then the IRS will want their cut! You see, in any case of any loan debt being forgiven or otherwise being "written off", you will get a 1099 for "miscellaneous income" in the amount of the forgiven loan. And, even though it would have taken the rest of your life to pay off your student loans, the IRS will generally give you only 18 months to pay your "income tax"!


Wounded veteran sees student debt forgiven but $62K tax bill
Associated Press Associated Press 9 hours ago

First Lt. Will Milzarski served two tours in Afghanistan that left him with a traumatic brain injury, post-traumatic stress disorder and hearing loss. The federal government canceled $223,000 in student loan debt after deeming him totally and permanently disabled.

The 47-year-old veteran, who said the debt is largely attributed to his law degree, told the Lansing State Journal that the IRS' notice surprised him.

"One part of government says, 'We recognize your service, we recognize your inability to work," Milzarski said. "The other branch says, 'Give us your blood.' Well, the U.S. Army already took a lot of my blood."

Michigan State University's Low-Income Tax Clinic has agreed to take on the issue. Joshua Wease, a law professor from the clinic, said the tax in Milzarski's case isn't logical.

"If an individual has been deemed disabled and unable to pay their student loans, it seems incredible that they wouldn't also be deemed unable to pay the taxes on the forgiveness of those same student loans," Wease said.

Wease said the IRS rejected an offer to pay a lower amount and the clinic is appealing the decision, which may take months. He said the clinic is first working with the federal government because Michigan taxes are based on federal decisions about income.

Milzarski said he's also turned to his state and congressional representatives about the issue.

Republican state Sen. Rick Jones said Thursday he's drafting a bill that would exempt loan forgiveness for wounded vets under state law. The bill likely wouldn't help Milzarski because it won't be retroactive, but the veteran said he'll be glad to see the legislation passed.

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Dora Hates You

...that's just not right.

...seriously.

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The REAL truth is....both of the forum idiots are OWNED.
-BOTH of them have no clue who their owner is.
-They are both card carrying narcissists.
^These are PROVED facts.

Zero, I worked 2 jobs

Two student type jobs won't pay for med school or law school. I don't think it will pay for regular state school undergrad these days either. Va Tech and W&M are a lot more expensive than when I went to school many years ago. The summer job I had as a biotech covered the majority of my Va Tech expenses. That same biotech job still exists but the salary only covers about 1/3 of current annual full time student expenses at Vippy Sue. I went to W&M on a fellowship and partial assistanship so that didn't cost me anything and school was my job for that one but I think it costs a ton to go there for a law or business degree.

Only sure debt free way is to do what my brother did and do community college followed by local 4-year while working near full time and living at home.

I'm not sure why anyone finds the 1099 for forgiven debt a surprise. People should think about that before seeking a really expensive degree like law, med veterinary, etc... Especially if the income prospects are modest relative to the debt like they are for veterinarians or law degrees that go into some sort of social work or public service. 

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Scholarships undergrad and stipend/tuition waver grad school.

But I was fortunate.

GI Bill + working full time while in college + living way beneath my means for several years to pay down my loans early.

Zero debt.

Mine was covered by the GI Bill in the 1970's. The Bill paid for all of my tuition and provided me with $250 a month for "living expenses". Bonus was, The FSU VA Department hired me as a part-time (20 hours/week) Certifications Clerk to work in the Registrar's Office. The pay was $250 a month! A lot of the "hippies" were just scraping by, but it seemed that us Vets were doing pretty good. Not living "high on the hog", but not living with the bottom feeders!

But, when I've talked about this at a certain watering hole when "student debt" is mentioned there were more than a few who thought I was Out of My Fooking Mind!

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Dora Hates You