Peters, Stabenow Introduce Student Tax Relief Act

WASHINGTON, DC — U.S. Senators Gary Peters and Debbie Stabenow today joined six of their colleagues to introduce the Student Tax Relief Act, a bill that would protect defrauded student borrowers from being taxed on their forgiven loans. This legislation follows actions by the Department of Education to protect defrauded students at 100 Corinthian Colleges across the country, including five Everest Colleges in Michigan, and ensures that borrowers at any schools whose loans were forgiven receive the same relief. 

“As the cost of college becomes more and more burdensome, we must do what we can to protect hardworking students seeking higher education,” said Senator Peters. “The Student Tax Relief Act will ensure that defrauded students are not hit with onerous taxes that prevent them from achieving financial security and continued success outside the classroom.”

“When students take out loans to attend college, they should get a fair deal and a fair shot,” said Senator Stabenow.  “No student should be the victim of false advertising from a college that promises skills or job placement.  And the last thing they deserve is to be hit with an enormous tax burden on their forgiven loans.”

Senator Stabenow and Senator Peters joined their colleagues in sending a letter to Department of Education Secretary John King in April and President Obama in March calling on the Administration to provide fair debt relief to victims of unlawful or deceptive practices in higher education through a tough borrower defense rule.  More information on the decision by the Department of Education to discharge loans of defrauded students may be found here and the full list of the schools eligible for a loan discharge may be found here.