Private Student Loan Relief: Discharge for Death or Permanent Disability.
This bill mandates that private education loans must be discharged (canceled) if the student borrower dies or suffers a total and permanent disability. The legislation protects borrowers and cosigners from liability and ensures that the discharged debt is not counted as taxable income. These protections aim to alleviate financial burdens during tragic circumstances.
Key points
Private student loans must be canceled upon the death or total and permanent disability of the student borrower.
Cosigners are also relieved of their debt obligation when the loan is discharged.
The amount of the discharged debt due to death or disability will not be treated as taxable income.
Loan holders are prohibited from attempting collection or monitoring the disability status after the discharge.
Expired
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