Section 31 Student Loan Forgiveness Income Tax Exemption

Paragraph (2) of subsection (a) of section 2 of said chapter 62 of the General Laws, as so appearing, is hereby amended by adding the following subparagraph:-

(R) To the extent not otherwise excluded from gross income, in whole or in part, income attributable to the discharge of:

(i) any loan provided expressly for postsecondary education, regardless of whether provided through the educational institution or directly to the borrower; provided, however, that the loan was made, insured or guaranteed by: (A) the United States or an instrumentality or agency thereof; (B) a state, territory or possession of the United States, the District of Columbia or any political subdivision thereof; or (C) an eligible educational institution as defined in section 25A(f)(2) of the Code;

(ii) any private education loan as defined in 15 U.S.C. 1650(a)(8);

iii) any loan made by any educational organization that normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on; provided, however, that the loan was made pursuant to: (A) an agreement with any entity described in clause (i) or any private education lender, as defined in said 15 U.S.C. 1650(a)(7), under which the funds from which the loan was made were provided to such educational organization; or (B) a program of the educational organization that is designed to encourage students to serve in occupations with unmet needs or in areas with unmet needs; and provided further, that the service provided by the students or former students are for, or under the direction of, a governmental unit or an organization described in section 501(c)(3) of the Code and are exempt from tax under section 501(a) of the Code; or

(iv) any loan made by an educational organization that normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on or by an organization exempt from tax under section 501(a) of the Code to refinance a loan to an individual to assist the individual in attending any such educational organization; provided, however, that the refinancing loan shall be pursuant to a program of the refinancing organization that complies with the requirements of subclause (B) of clause (iii); and provided further, that this subparagraph shall not apply to the discharge of a loan made by an educational organization described in clause (iii) or made by a private education lender, as defined in 15 U.S.C. 1650(a)(7), for services performed for the educational organization or for the private education lender.